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 $10,351,500. Unfortunately for the previous owner, he had purchased it in 1998 at a price of $12,457,500. 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.) Annual rate of return %
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- 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 sculptureAlthough 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 $9.12 million. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12.63 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.)Although appealing to more refined tastes, art as a collectible has not always performed so profitably. Assume that in 2015, an auction house sold a statute at auction for a price of $10,647,500. Unfortunately for the previous owner, he had purchased it in 2011 at a price of $12,681,500. 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 2021, an auction house sold a painting at auction for a price of $1,030,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,610,000. What was his annual rate of return on this painting?
- 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.The renowned artist Pablo Picasso created hundreds of paintings and sculptures as well as drawings and sketches numbering in the thousands. He is said to have settled restaurant bills by producing sketches on the spot. (a) What effect does the existence of this large body of work have on the price (increase or decrease of individual pieces of his art? Please explain. (b) Might his heirs suffer financially from being bequeathed too many of his works? As the heirs’ financial advisor, what strategy would you advise them to pursue in selling pieces of his work (sell all the paintings at once or sell them one at a time over several months (or years))? Please give an explanation.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
- 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).In 1626, Dutchman Peter Minuit purchased Manhattan Island from a local Native American tribe. Historians estimate that the price he paid for the island was about $24 worth of goods, including beads, trinkets, cloth, kettles, and axe heads. Many people find it laughable that Manhattan Island would be sold for $24, but you need to consider the future value (FV) of that price in more current times. If the $24 purchase price could have been invested at a 4.5% annual interest rate, what is its value as of 2012 (386 years later)? $660,384,991.64 $488,110,646.00 $574,247,818.82 $758,007,120.84Your 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…