Phil Dunphy, a real estate agent, is considering whether he should list an unusual $755,485 house for sale. If he lists it, he will need to spend $5,573 in advertising, staging, and fresh cookies. The current owner has given Phil 6 months to sell the house. If he sells it, he will receive a commission of $20,636. If he is unable to sell the house, he will lose the listing and his expenses. Phil estimates the probability of selling this house in 6 months to be 71%. What is the expected profit on this listing? Your Answer:
Phil Dunphy, a real estate agent, is considering whether he should list an unusual $755,485 house for sale. If he lists it, he will need to spend $5,573 in advertising, staging, and fresh cookies. The current owner has given Phil 6 months to sell the house. If he sells it, he will receive a commission of $20,636. If he is unable to sell the house, he will lose the listing and his expenses. Phil estimates the probability of selling this house in 6 months to be 71%. What is the expected profit on this listing? Your Answer:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Phil Dunphy, a real estate agent, is considering whether he should list an unusual $755,485 house for sale. If he lists it, he will need to spend $5,573 in advertising, staging, and fresh cookies. The current owner has given Phil 6 months to sell the house. If he sells it, he will receive a commission of $20,636. If he is unable to sell the house, he will lose the listing and his expenses. Phil estimates the probability of selling this house in 6 months to be 71%. What is the expected profit on this listing?
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