Explanation Approach: Discrete division of items: The items/goods being divided cannot be split into fractional parts Continuous division of items: The items/goods being divided can be split into the required fractional parts. In the method of sealed bids, Each person analyses the worth and submits a bid on each discrete division of item. Each item goes to the person whose bid is the highest for that item. A person’s fair share of an estate is the product of estate value estimated by the person and the percentage or the fractional part of the person’s share in the estate. If each person gets an equal share, the person’s fair share of an estate is Estate value estimated by the person Number of person sharing equally . Then each person pays/receives money such that they all have their fair share. Finally, the surplus or remaining money is divided equally among them. Given Information: Two person, Dennis and Zadie, bids for obtaining sole rights to the copyright. Dennis holds 40% of current entitlement to the book and Zadie holds 60% of current entitlement. Dennis’s bid on copyright is $20,000 and Zadie’s bid on copyright is $28,000. Calculation: From the given information, Dennis has estimated the value for copyright as $20,000 and Zadie has estimated the value for copyright as $28,000. In this problem, Zadie’s bid is higher than Dennis’s bid. Hence, the copyright goes to the highest bidder, Zadie. Note that, Dennis and Zadie hold 40% and 60% of current entitlement to the book respectively. Dennis’s fair share of estate = $ 2 0 , 0 0 0 × 40 100 = $ 8 , 0 0 0 Zadie’s fair share of estate = $ 2 8 , 0 0 0 × 60 100 = $ 1 6 , 8 0 0 In this problem, Zadie’s bid is higher than Dennis’s bid. Hence, the copyright goes to the highest bidder, Zadie. The table below illustrates the person’s fair share of estate. Dennis (40%)

6th Edition

ISBN: 9780134434681

Author: Tom Pirnot

Publisher: PEARSON

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Chapter 10.4, Problem 11E

To determine

To Complete:

The following table using the method of sealed bids.

Dennis (40%) Zadie (60%)

Pays to pool (+) or receives from estate (−)

Division of pool balance ($ )

Summary of cash

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Chapter 10.4, Problem 10E

Chapter 10.4, Problem 12E

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The following table using the method of sealed bids. Dennis (40%) Zadie (60%) Pays to pool ( + ) or receives from estate ( − ) Division of pool balance ($ ) Summary of cash

Solution Summary: The author explains the method of sealed bids. Each person analyses the worth and submits a bid on each discrete division of item.

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To Complete:

The following table using the method of sealed bids.

Dennis (40%) Zadie (60%)

Pays to pool (+) or receives from estate (−)

Division of pool balance ($ )

Summary of cash

Want to see the full answer?

Chapter 10 Solutions

	Dennis (40%)	Zadie (60%)
Pays to pool (+) or receives from estate (−)
Division of pool balance ($ )
Summary of cash

The following table using the method of sealed bids. Dennis (40%) Zadie (60%) Pays to pool ( + ) or receives from estate ( − ) Division of pool balance ($ ) Summary of cash

Solution Summary: The author explains the method of sealed bids. Each person analyses the worth and submits a bid on each discrete division of item.

Concept explainers

Videos

To Complete: The following table using the method of sealed bids. Dennis (40%) Zadie (60%) Pays to pool (+) or receives from estate (−) Division of pool balance ($ ) Summary of cash

Want to see the full answer?

Chapter 10 Solutions

To Complete:

The following table using the method of sealed bids.

Dennis (40%) Zadie (60%)

Pays to pool (+) or receives from estate (−)

Division of pool balance ($ )

Summary of cash