Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $9.63 million. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12.84 million. What was his annual rate of return on this sculpture?

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $9.63 million. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12.84 million. What was his annual rate of return on this sculpture?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 17DQ

See similar textbooks

Similar questions

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $10,311,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,377,500. What was his annual rate of return (percentage) on this sculpture?
Although appealing to more refined tastes, art as a collectible has not always performed profitability. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $10,311,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,377,500. What was his annual rate of return on the sculpture?
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $10,371,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,497,500. What was his annual rate of return on this sculpture
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $9.86 million. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12.56 million. What was his annual rate of return on this sculpture? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The Goodson Company is a chain of retail electronics stores. How much of a loss can Goodson deduct in each of the following cases? Explain. a. An employee drops a 65-inch 3D television, cracking the plastic casing on the back. The television normally sells for 3,300. The cost of the set is 2,400, and Goodson sells the damaged set for 1,500. b. The company replaces its inventory system. The old system cost 45,000 and has a basis of 16,000. The company sells the old system for 7,500. The new system costs 75,000. c. A flood damages one of Goodsons retail stores. The building suffers extensive water damage. The basis of the building is 60,000, and the cost of repairing the damage is 72,000. The insurance company reimburses Goodson 50,000. d. The owner of Goodson sells a complete home entertainment center (e.g., projection TV, DVD, stereo system) to his sister for 7,000. The usual sales price is 8,500. The system costs 6,300. e. Assume the same facts as in part d, except that the owner sells the home entertainment center to his sister for 5,500. f. The owner of Goodson finds that the controller has embezzled 10,000 from the company. Before the owner can confront the controller, the controller leaves town and cannot be found. g. Upon arriving at the companys headquarters, the vice president of sales finds that someone has broken in and stolen three computers. The damage to the outside door is extensive. The cost of repairing the door is 1,500, and the cost of replacing the three computers is 9,500. The original cost of the computers totals 10,500. Goodsons basis in the computers is 5,000. The thieves also stole 350 from the petty cash fund. Goodson files a claim with its insurance company and receives 4,800.
Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to copper (and 97.5% zinc) 2.5% to save money. Your favorite aunt has a collection of 5,000 pennies minted before 1982, and she intends on gifting the collection to you. Solve, a. What is the collection’s value based on metal content alone? Copper sells for $3.50 per pound and zinc for $1 per pound. It takes approximately 130 pre-1982 pennies to add up to one pound of total weight. b. If it cost the U.S. Mint $0.017 to produce a penny in 2012, is it time to eliminate pennies and round off all financial transactions to the nearest 5 cents (nickel)? As a matter of interest, it cost the government almost 10 cents to produce a nickel in 2012.
In the late 1990s, car leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually two years, and then have the option of keeping the car. If the customer decided to keep the car, the customer would pay a price to the manufacturer, the “residual value,” computed as 60% of the new car price. The manufacturer would then sell the returned cars at auction. In 1999, manufacturers lost an average of $480 on each returned car (the auction price was, on average, $480 less than the residual value).
A noted accountant once remarked that the optimal number of faulty TV sets for the XYZ Electric Co. Ltd. to sell is "not zero," even if XYZ promises to repair all faulty XYZ sets that break down, for whatever reason, within two years of purchase. The optimal number would be "not zero" because None of the other alternatives are correct The repair costs are tax deductible It is cheaper (and, therefore more profitable) to repair a few sets than to have such stringent quality control that no defects result All the three statements about faulty TV sets are correct Zero defects could not be accounted for and hence the accounting system could not capture the information to better plan future production
Comic books have recently grown in popularity among collectors. Spiderman, who first appeared in Amazing Fantasy No. 15, is an extremely popular superhero. The comic book sold in August 1963 at a cover price of 12 cents. In 2011, a copy of this issue had mutated to a price of $1.1 million at auction, the first Marvel Comics superhero to hit the million dollar mark. This seems like a very high return to the untrained eye, and indeed it is! How much is the percent return per year compounded annually? Assume number of periods is 48 years.
Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion machine. The company could keep it in inventory for a possible future product and estimates that the reservation value is $150,000. Your dealings on the secondhand market lead you to believe that if you commit to a price of $200,000, there is a 0.5 chance you will be able to sell the machine. If you commit to a price of $250,000, there is a 0.3 chance you will be able to sell the machine. If you commit to a price of $300,000, there is a 0.1 chance you will be able to sell the machine. These probabilities are summarized in the following table. For each posted price, enter the expected value of attempting to sell the machine at that price. (Hint: Be sure to take into account the value of the machine to your company in the event that you are not be able to sell the machine.) Posted Price Probability of Sale Expected Value ($) ($) $300,000 0.1…
Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion machine. The company could keep it in inventory for a possible future product and estimates that the reservation value is $100,000. Your dealings on the secondhand market lead you to believe that if you commit to a price of $200,000, there is a 0.4 chance you will be able to sell the machine. If you commit to a price of $300,000, there is a 0.25 chance you will be able to sell the machine. If you commit to a price of $400,000, there is a 0.1 chance you will be able to sell the machine. These probabilities are summarized in the following table. For each posted price, enter the expected value of attempting to sell the machine at that price. (Hint: Be sure to take into account the value of the machine to your company in the event that you are not be able to sell the machine.) Posted Price Probability of Sale Expected Value ($) ($) $400,000 0.1 $300,000 0.25…
Vaughn, Inc. has 9700 obsolete calculators, which are carried in inventory at a cost of $19900. If the calculators are scrapped, they can be sold for $1.20 each (for parts). If they are repackaged, at a cost of $14300, they could be sold to toy stores for $2.50 per unit. What alternative should be chosen, and why? Repackage; revenue is $5600 greater than cost Scrap; operating income is $1690 greater Scrap; incremental loss is $8260 Repackage; receive operating income of $9950