Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property it can then be sold for $165000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100000 and $150000. a. Develop a worksheet that can be used to simulate the bids made by the two competitors. Strassel is considering a bid of $130000 for the property. Using simulation of 1000 trials, what is the estimate of the probability Strassel will be able to obtain the property using a bid of $130000? Round your answer to 1 decimal place. Enter your answer as a percent. % b. How much does Strassel need to bid to be assured of obtaining the property? What is the profit associated with this bid? 24

Strassel Investors buys real estate, develops it, and resells it for a profit. A new property is available, and Bud Strassel, the president and owner of Strassel Investors, believes if he purchases and develops this property it can then be sold for $165000. The current property owner has asked for bids and stated that the property will be sold for the highest bid in excess of $100000. Two competitors will be submitting bids for the property. Strassel does not know what the competitors will bid, but he assumes for planning purposes that the amount bid by each competitor will be uniformly distributed between $100000 and $150000. a. Develop a worksheet that can be used to simulate the bids made by the two competitors. Strassel is considering a bid of $130000 for the property. Using simulation of 1000 trials, what is the estimate of the probability Strassel will be able to obtain the property using a bid of $130000? Round your answer to 1 decimal place. Enter your answer as a percent. % b. How much does Strassel need to bid to be assured of obtaining the property? What is the profit associated with this bid? 24

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 32P

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