Phil Dunphy, a real estate agent, is considering whether he should list an unusual $393,668 house for sale. If he lists it, he will need to spend $4,295 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 $16,068. 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 25%. What is the expected profit on this listing? Your Answer:

Phil Dunphy, a real estate agent, is considering whether he should list an unusual $393,668 house for sale. If he lists it, he will need to spend $4,295 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 $16,068. 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 25%. What is the expected profit on this listing? Your Answer:

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter12: Nonrecognition Transactions

Section: Chapter Questions

Problem 55TA

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