QUESTION 15 Suppose I value your business at $580,000, you value your business at $550,000, and...
QUESTION 15
-
Suppose I value your business at $580,000, you value your business at $550,000, and I must pay an attorney $15,000 to complete the required transfer documents for the county government. What is the outcome from the potential transaction?
A. I buy the business from you at a price between $580,000 and $550,000
B. The business is sold for $565,000
C. The transaction does not occur because the transaction costs exceed the value created
D. You buy the business from me at a price between $580,000 and $550,000
Homework Answers
The solution to this question will be that, the business will be
sold at 
565000.
Reason- You value the company at 580000, and i value
it at 550000. Now there is
an additional attorney cost of 15000. So if I am
willing to sell it at 565000, you will buy
the company. Now since, I value the company at 550000, I willingly
accept the price of 565000 that you
offer, hence option B.
If you find my answer logical, please do rate it up.
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QUESTION 15
Suppose I value your business at $580,000, you value your
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