A very thought provoking quiz for the serious people!

[MortgageGuru]

Mr Tan, a shoe dealer, sells a pair of shoe for $30 at the cost of $20.

One customer bought a pair of shoe and paid $50 but Mr Tan did not have small change so he went to his neighbor and break it into smaller change.

After the client goes off getting the change and shoe, Mr Tan neighbor realized the $50 is fake and Mr Tan needs to pay back his neighbor.

Here comes the question, how much is Mr Tan's total loss?

This is a quiz to test how your business sense is, please explain how you arrive at your answer!

[Luke65]

$70.....

[MrTan]

$40.....

[Luke65]

oh yes, $40 is correct

[star]

$20 shoe cost price. Total $40

[MortgageGuru]

I got the same answer as majority of you at $40, but I went further taking this $40 consideration that it could yield me two additional pairs of shoe profit which is $20.
Assuming I don't made this $40 loss, I should earn $20 extra more on top of the $10 I should made at the start so isn't it total loss of $70? Did I show any business sense here on the $40 thereafter or did I show my stupidity?

[Citizen]

Absolute it is $40, but if factor in unrealized or potential it can be different.

[DayDreamer]

Lost $20 to the neighbour which he needs to pay back because it was fake.
Lost $20 to the cheater which he paid with real money.
Lost $20 for the cost of the shoe.
Lost $10 which was his profit.

$70

[Citizen]

Is it same as create money from thin air?
Cheater earned how much + neighbor earned how much ? = seller lost
$10 is profit

[august]

$60

[Kelonguni]

Cannot really say for sure.

The first sentence is misleading.

The following losses are valid:

$20 on shoe cost
$70 to change ($20 to customer and $50 back to neighbour)
$10 on wage transaction cost

Total $90 to $100 depending on whether you wish to include wage costs.

[Citizen]

Cannot really say for sure.

The first sentence is misleading.

The following losses are valid:

$20 on shoe cost
$70 to change ($20 to customer and $50 back to neighbour)
$10 on wage transaction cost

Total $90 to $100 depending on whether you wish to include wage costs.

When neighbor exchange $50 to seller , seller return change $20 to the cheater after deducted the shoe $30 and seller kept the $30 bal. when discovered faked , seller only top up $20 to the bal $30 which he kept to $50 and returned neighbor.
1 neighbor never make any extra.
2 cheater earned a pair shoe ( 30 or 20) and earned change of $20.
3 seller lost a pair of shoe ( 30 or 20 ) and $20 ( top up to return neighbor )

[Kelonguni]

But seller still has a fake $50 after changing back with neighbour? Who bears this?

When neighbor exchange $50 to seller , seller return change $20 after deducted the shoe $30 to cheater and seller kept the $30 bal. when discovered faked , seller only top up $20 to the bal $30 which he kept to $50 and returned neighbor.
1 neighbor never make any extra.
2 cheater earned a pair shoe ( 30 or 20) and earned change of $20.
3 seller lost a pair of shoe ( 30 or 20 ) and $20 ( top up to return neighbor )

[Citizen]

Ya hor , perhaps he can use it to buy more shoes from his supplier. Just kidding. It is an offence if you know it is fake unless you don't know. In this case he already knew it.

[Kelonguni]

Ya hor , perhaps he can use it to buy more shoes from his supplier. Just kidding. It is an offence if you know it is fake unless you don't know. In this case he already knew it.

Oh yah I forgot to include that he has net input from neighbor of $30 when he first changed. So should be $60 or 70 dependent on whether wage cost was included.

[teddybear]

Seller lah, if he can use the fake $50 then his loss will be much less......

Very simple wah, just assume the seller got change, that mean his losses are:
1) $20 paid to the buyer
2) $20 for the cost of shoes (that the buyer took away)
3) remaining $50 of fake money cannot be used
So total actual loss $90 (assuming his cost of shoes of $20 include all business-related costs to procure the shoes and rental etc to sell it in his shop)......

But seller still has a fake $50 after changing back with neighbour? Who bears this?

[Kelonguni]

He has leftover of $30 from neighbor when he first changed the note, so net loss to neighbour is $20 only.

Nice teaser.

Seller lah, if he can use the fake $50 then his loss will be much less......

Very simple wah, just assume the seller got change, that mean his losses are:
1) $20 paid to the buyer
2) $20 for the cost of shoes (that the buyer took away)
3) remaining $50 of fake money cannot be used
So total actual loss $90.

[teddybear]

Qn says Mr Tan needs to pay back the neighbor, so neighbor no loss lah!
Mr Tan bear all loss...

He has leftover of $30 from neighbor when he first changed the note, so net loss to neighbour is $20 only.

Nice teaser.

[Citizen]

Like that how to be a real estate investor? Property investment involved more than this

[Kelonguni]

Yes Mr Tan bears all loss.

Imagine this Mr Bear: When Mr Tan first took the fake $50 from cheater to change with neighbour, his neighbour gave him real $50. From this real $50, he passes $20 to the cheater and pockets $30. Later on, when it is found that the neighbour is holding a fake $50, Mr Tan uses the original $30 left over from neighbour and tops up $20 to pay his neighbour real $50. So his net top up is only $20.

Qn says Mr Tan needs to pay back the neighbor, so neighbor no loss lah!
Mr Tan bear all loss...

[Kelonguni]

Like that how to be a real estate investor? Property investment involved more than this

An investor in SG is also subject to a lot of forces beyond their control.

Cannot count so precisely lah...

[teddybear]

So Mr Tan is holding a $50 fake notes that cannot be used, so isn't that a loss of $50 here?

Yes Mr Tan bears all loss.

Imagine this Mr Bear: When Mr Tan first took the fake $50 from cheater to change with neighbour, his neighbour gave him real $50. From this real $50, he passes $20 to the cheater and pockets $30. Later on, when it is found that the neighbour is holding a fake $50, Mr Tan uses the original $30 left over from neighbour and tops up $20 to pay his neighbour real $50. So his net top up is only $20.

[MortgageGuru]

So Mr Tan is holding a $50 fake notes that cannot be used, so isn't that a loss of $50 here?

If this $50 is taken as loss, then you have to offset it by adding the neighbour giving him real $50 as a gain.
So it actually contra off.

[MortgageGuru]

This quiz only goes to show how individual values money and what they'll do with their money.

[totostriker]

Isn't the answer $90? or $90+$10 loss of sales profit?

[Citizen]

[QUOTE=teddybear;513208]Seller lah, if he can use the fake $50 then his loss will be much less......

If seller can use the fake $50 then he has a profit of $10 and not his loss will be much less or presume no fake dollar in the first place , what will the seller profit? Isn't it $10 ?

[teddybear]

No fake $ takes place, seller's profit = $10.
Fake $50 received by seller, have to pay buyer $20, so lost $20.
Seller lost a pair of shoes, costing $20.
Seller received an equivalent of $50 that cannot be used, so lost another $50.
So I suppose real lost = $20 + $20 + $50?

If seller can use the fake $50 to change to real $50, then total he profits $10 (because $50 - $20 - $20).

Seller lah, if he can use the fake $50 then his loss will be much less......

If seller can use the fake $50 then he has a profit of $10 and not his loss will be much less or presume no fake dollar in the first place , what will the seller profit? Isn't it $10 ?

[teddybear]

Didn't the Qn said the neighbour asking back for the real $50 he had given Mr Tan and hence Mr Tan is now holding the fake $50?

If this $50 is taken as loss, then you have to offset it by adding the neighbour giving him real $50 as a gain.
So it actually contra off.

[Kelonguni]

Indeed mind boggling, like how the US plays with our minds via money creation.

Actually overall nett, seller should lose $20 (cost of shoes), $20 (compensating for fake note, $20 to neighbor), and $10 for loss of profits. He never took out any other note so his loss is $40 excluding loss of profits.

After changing with neighbor and paying the buyer, he has a $30 leftover from the neighbor (fake note still with neighbour). He already lost the shoe and redeemed the fake $50 with this $30 and another $20 he needs to put in.

Buyer gains $40, seller losses $40. Neighbor no difference at the end. Excluding profit calculations.

The tricky part is if we consider the neighbors' real notes as the seller's notes.

No fake $ takes place, seller's profit = $10.
Fake $50 received by seller, have to pay buyer $20, so lost $20.
Seller lost a pair of shoes, costing $20.
Seller received an equivalent of $50 that cannot be used, so lost another $50.
So I suppose real lost = $20 + $20 + $50?

If seller can use the fake $50 to change to real $50, then total he profits $10 (because $50 - $20 - $20).

[teddybear]

Ops, on more careful thought you are right............ Got confused with the fake $50..............

Indeed mind boggling, like how the US plays with our minds via money creation.

Actually overall nett, seller should lose $20 (cost of shoes), $20 (compensating for fake note, $20 to neighbor), and $10 for loss of profits. He never took out any other note so his loss is $40 excluding loss of profits.

After changing with neighbor and paying the buyer, he has a $30 leftover from the neighbor (fake note still with neighbour). He already lost the shoe and redeemed the fake $50 with this $30 and another $20 he needs to put in.

Buyer gains $40, seller losses $40. Neighbor no difference at the end. Excluding profit calculations.

The tricky part is if we consider the neighbors' real notes as the seller's notes.