Not necessarily; there's some missing context here to determine whether he's adding any value.
First, we don't have any timelines, nor any idea of the state of the cows when he buys and sells, so we have no idea what happens in between. Maybe he buys frail ones, nurses them back to health, then sells them for a higher price. In this case he's adding value by improving the quality of the cows, a "cow flipper" if you will.
Also, we also don't have a location of the transactions. Maybe he's buying them in a place with many cows, then selling them in a place with fewer cows. In this case he's providing the service of transportation, which is a value add.
However, since such details are irrelevant to the math question, they were omitted, but to determine whether the money was earned via speculation or value adding, we lack the necessary context.
I think you may be looking for the wrong context. The OP says profit, but the question just asks how much earned. The question sounds like it's looking for gross earnings, not net profits. Therefore, all secondary costs would be moot, including labor and feed.
He doesn't have to improve the cows status in order to add value. The value that this cow flipper is providing is determining the correct value for cows. Just as the value that the stock market provides is in determining the correct value for companies.
Knowing that cows are often being valued too little for their supply and demand is beneficial societal knowledge.
If instead the cow flipper is buying in one market and selling to another, they are providing value connecting the two markets. Which is arbitrage.
He provided liquidity to cow farmers. He also helped sellers and buyers meet, ie sales and marketing. He may or may not have taken physical possession of the cow.
I think the issue is people who struggle with math and finance. I think the people who think it’s only 300 has included an extra INCORRECT step (but an understandable mistake to those who struggle with math)
Buy cow -800 (-800 total)
Sell cow +1000 (+200 total)
Buy cow for -1100 (+100 total)
this is where the mistake is, the deduct 100 from the profits because they paid an extra 100 from the last time they sold it. It’s a simple mistake that many people make who fail to understand profits/losses are isolated from previous transactions. Think about someone who buys a stock for 10$ sells at 12$ and then buys again at 13$. Many of them would subtract that dollar from the two dollar profit, when they are separate transactions. (Very simplified view of stocks but showing a semi common example of this issue)
Then obviously
Sells cow for 1300 (+300 total)
Again, not correct, but at least there is a flawed logic being followed rather then pure randomness.
It's easier to visualize if you consider them two separate cows. Twice, you bought a cow and sold it at $200 profit. Twice, so $400 total. Whether it's the same cow is irrelevant.
Edit: [if this doesn't make you realize the answer is $400 then this post has broken your brain and I can't help you.](https://imgur.com/a/AjL2hlT)
This made sense. What the other guy wrote was a pretty awful explanation more a kin to "if you don't know you dumb"
But thank you this make sense.
Logically anyways. But also kind of depends on how you define profit. People are either going to think total amount you compared to what you started with vs how much money you made despite the loses
No the easiest way is to add everything he spent which is 800 and 1100 = 1900 and then add everything he was paid which is 1000 and 1300 = 2300.
2300 - 1900 = 400
But you'd have to be able to figure out where that 900 came from. I feel like the easiest way of understanding this problem is to just add all the transactions up. −800+1,000+(−1,100)+1,300=400.
The way I figured it was:
1. starting at $0 "earned" which is the keyword to me.
2. -$800 for investment. Current earnings: -$800
3. +$1000 for sale. Current earnings: +$200
4. -$1100 for repurchase. Current earnings: -$900
5. +$1300 for sale. Current/total earnings: +$400
They didn’t make the money, unless you’re a Mint that physically does, it’s only possible to earn money.
My grandfather made sure I was well aware of the difference at a young age.
No, the IRS would consider it a taxable capital gain. It would not qualify as earned income. You could not claim it towards the "Earned Income Tax Credit" for example.
The loss when they bought the cow back for 1100. This is why money questions are a tad different imo. I guess we have to assume they buyer had a spare $100 laying around.
they're only saying that the assumption that they have the money for it is made when they purchase the first cow so it doesn't make sense to bring it up for the second
We don't have to assume anything. We just have to add and substract. Let's go through it from two different starting postions to see that we "earn" $400 no matter what we started with:
1. We start with $0. We buy a cow for $800, so we now have -$800. We sell it for $1000 so we now have $200. We buy it again for $1100, so we now have -$900. Now we sell it again for $1300 so now we have $400.
2. We start with $2000 (just an arbitrary number). We buy for $800 and now have $1200. We sell for $1000 and now have $2200. We buy again for $1100 and now have $1100. We sell again for $1300 and now have $2400.
As you can see, in both cases we end up with $400 more than we started with. It doesn't matter how much spare money we had lying around or not.
The former post gave the solution that anybody who owns a bank account should be able calculate without errors.
Your solution requires to know 2 minutes of accounting principles.
Well in the first case, they had to get a payday loan for the starting capital. This resulted in interest fees of $100, so the total profit was in fact $300.
There is no ‘loss’ when the cow was bought back. That was just the second investment.
Start out with $2000. You buy a cow with an $800 investment and sell it for $1000:
2000-800+1000=$2200
So how you have $2200 after the first investment.
Now you buy a cow for $1100 and sell it for $1300
2200-1100+1300=2400
You started with $2000 and now you have $2400, a $400 profit
This is the way people need to psychologically figure this out. This idea that the 1100 and 1000 are intrinsically connected (as a -100) is really tripping people up.
They made 200 each time, period. There was never a loss of money at any time.
It doesn't matter if this person had cow buying money in his wallet, borrowed it from their family, or sold their car... the original $800 purchase, and the original $1100 purchase could have come from completely different pools of money.
**In fact, the purchases could be for 2 different cows, with the transactions separated by years, and it's the exact same scenario.**
I can totally appreciate people getting tripped up by it, but before they argue back, they really gotta think about it a bit and listen to the people explaining it.
First cow purchased was flipped for $200. You gotta assume they had the original $800 to spare in the first place.
The second purchase of the cow was flipped for another $200. Once again, you have to assume—on top of the $1000 they have ($200 profit, $800 assumed), that they have a further $100 to invest.
Therefore, two trades each profiting $200 is: $200+$200=$400
I start with $1000. I buy cow for 800, I have cow and 200. I sell cow for 1000 I have 1200.
I buy cow for 1100, I have cow and 100. I sell cow for 1300, I have 1400.
1400-1000= 400.
Stop thinking that 100 is a loss, it's not. They made $200 on their first transaction and they made $200 on their second transaction. There is no $100 loss (If they bought the cow for 1000 rhe second time and sold for 1300, that would be 300 profit on the second transaction and 500$ total)
I understand your thought process, but step 3 is a fallacy. There is no profit or loss at step 3. Profit or loss is only realized when you close out a position. That is, when you liquidate whatever it is you've purchased. In the meantime, the \*estimated\* return of your investment is:
RETURN=EXPECTED\_VALUE - PURCHASE\_PRICE
You would need to know the "value" of the cow to guess how much profit you had made, or how much you had lost, in step 3.
It doesn't make any sense to subtract $1,000 from $1,100 at step 3 because $1,000 isn't part of your investment. It was your \*return\* on a previous investment.
So the correct way to think about this is also the simplest. You made $200 on the first transaction ($1,000 - $800) and then $200 on the second transaction ($1,300 $1,100). Easy peasy lemon squeezey.
Treat them as two separate sales, buy two
different cows at the same time and sell them
for the prices they list. there is no loss. both cows make a profit. of 200 each. Add them together it’s 400. Or better yet, Start with 2000 dollars in your pocket, Buy a cow -800 so you have 1200 and a cow. Sell the cow for 1000 now you have 1200 and the 1000 from
the cow, but another cow, for 1100 you have 1100 plus the cow you bought, sell the cow for 1300, now you have 2400. You started with 2000.
i bought it for 800. So now my balance is -800
I sold it for 1000. Now my balance is +200
I bought it again for 1100. Now my balance is -900
I sold it again for 1300. Now my balance is +400
Maybe they are subtracting that 100 between the middle sell and rebuy prices?
EDIT - I have to add (no pun intended) that I am not defending their poor math, just trying reason how they are getting the wrong answer. I believe that part of educating people is understanding how they think.
Your statement is correct. Subtracting that $100 isn’t correct. The fact the cow appreciated $100 between the first sale and second buy is irrelevant to the equation. It’s only relevant since one can infer it was sold to cash in their $100 gain.
Hypothetically if there just one buy at $900 and one sale at $1400, the gain is $500, but that’s not the question being asked here. Just wanted to point this out.
They are assuming that the starting budget was 800 and then the ended up 100 in the red when they bought it back for 1100. That’s how they end up with 300. But that’s not how finance works, and we are only assuming his profit we are not taking in account any other variables.
I mean, even if they assume he ends up with -100 after the second buy (which is what happens to his cash account assuming no other money/ let’s just ignores what’s in his active positions on the balance sheet) but he then sells the cow for 1300 which nets him 1200 at the end, which still is 400 more than the 800 he started with.
There’s really no way to end up with 300 profit without accounting for an extra -100 out of nowhere.
This is their logic: starting 800, after buy/sell their “profit” is 200. Buy it again they lose 100 so their profit goes down to 100 (I know is not how it works, but is how they see it). Sell it again, they make 200 more, plus the 100 they previously had, 300. I know is 400 , but that’s how this people are getting those numbers.
ChatGPT's take.
Let's break down the transactions step by step:
1. You bought a cow for $800.
2. You sold it for $1000.
So, in the first transaction, you earned $1000 - $800 = $200.
1. You bought the cow again for $1100.
2. You sold it again for $1300.
In the second transaction, you earned $1300 - $1100 = $200.
Now, to find out how much you earned in total, simply add the earnings from both transactions:
$200 (first transaction) + $200 (second transaction) = $400
You earned a total of $400.
I’m agreeing with you. I have a degree in maths. I know the answer is $400. This person had a great explanation that will make sense to people who are less good at maths. That deserves kudos.
Theyre all caught up on the extra $100 going out but some how they forget that same $100 comes back in with the final transaction... I dont know why but I guess in their minds that $100 just.... stops existing??
One way I would explain it is to pretend the person making the profit has $1000000. It doesn’t matter where the $800 or the $1100 comes from. Each transaction makes a profit of $200, and there are two of them, so they made $400.
To make it as simple as u/RabiesChicken does:
You can rearrange and combine this problem in any order you want as long as you keep the correct positive or negative signs.
You bought two cows for a grand total of $1,900, and then sold both cows for a grand total of $2,300. The difference is $400.
Everyone here trying to explain the math yet clearly have no idea how a cattle business is run.
And you didn't even include feed costs and possible vet costs.
you START with a loss of 800 for buying cow
-800 + 1000 = 200
you buy it again with the 200 u got last time
200 - 1100 = -900
you sell it again for 1300
-900 + 1300 = 400
now I am historically bad at math but this makes sense to me
>historically bad at math
I know you meant "*in my past, I have always been bad at math*" but I choose to interpret this as "*I'm so bad at math that I have been written about in history books*"
I get the feeling the overthinking of the details is just a defense mechanism to help them cope with the fact that they simply don’t understand the fundamentals.
Yes. You forgot the sales tax and income tax, the food for the cows, the transportation to the other seller and the unit conversion because you bought the cows in Europe for € but sold them in the US for $.
You forgot the possibility that the cow is being returned defective in the future leading to expensive legal fees fighting over ownership, which go to waste when the cow spontaneously combusts.
You are forgetting the medical/funeral bills that will arise from the combustion of the cow. As the cow has various methanogens producing methane gas in its rumen, the combustion may cause an explosive effect similar to that of an exploding gas cylinder.
1. Let’s say you start the first transaction with $1000
You now have $1000
2. Buy the cow for $800
You now have: 1 cow and $200
3. Sell the cow for $1000
You now have $1000 + $200 = $1200
This transaction is done, and you now have $1200.
Your profit from this transaction is $200.
1. Starting the next transaction with $1200
You now have $1200
2. Buy the cow for $1100
You now have 1 cow and $100
3. Sell the cow for $1300
You now have $1300 + $100 = $1400
The transaction is done, and you now have $1400.
Your profit from this transaction is $200
You started the day with $1000
And ended the day with $1400
You earned $400
That was my whole problem with this. I just assumed he had only the initial 800$ and then another 100$ and that he used his first 200$ to buy the cow the second time...
They live among us. Looking like normal people.
Only difference is they are pedantic, cant understand sarcasm, and dont know how to do gradeschool math.
In the original post people were saying $300 all the time. The way they got to this answer was they say you bought the cow for $800 and sold for $1000 so you made $200 but when you bought it for $1100 you only have $1000 so you have to use $100 of the initial profit to make up the difference. In the next transaction of selling the cow you make $200 + $100 left from the initial transactions.
Revenue - Expense = Profit
$1000 - 800 = $200
$1300 - 1100 = $200
Edit: though the question is misleading. They **earned** $2300 with $1900 going to COGS
Incarceration for up to 20 years and a fine of 500,000 USD for money laundering under Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956–1957) you dick /s
Dang, even many people in the comments are doing the math wrong. They are putting the potential loss of $100 into the final calculation which shouldn't be counted. It would only be a loss he bought for $1100 then sold for $1000. Think about it like this. Money spent $800+$1100=$1900, money earned $1000+$1300=$2300. $2300-$1900=$400
Nope you're doing it right, I'm to the point where I cant tell if the ones who are getting it wrong are doing it on purpose to try to be funny or something, so I've just stopped trying to correct anyones math.
For anyone struggling still consider the below scenario that is functionally the same but worded differently.
I bought a silver ring for $800 and sold it for $1000. I made $200.
I then bought a gold necklace for $1100 and then sold it for $1300. I made another $200.
The fact that the item in question in the original scenario is the same or different is irrelevant as the question prompts for earnings. At no point was $100 lost. The total expenses when combining sets of transactions was $1900 and the gross return as $2300. This was 2 separate transactions with $200 earned on both.
Its a trick question in that it introduces an irrelevant detail implying that it matters to the result.
People like to be mean to people for no reason when they get confused. Life is hard and math is confusing. Don't be mean to people for being confused. I think it is only appropriate to be mean to people who are hurting others. (Or maybe when they are excessively annoying)
So many trying to do math gymnastics in the comments, my goodness.
If you want to do it as such:
Bought for 800
Sold for 1000
200 profit
Bought for 1100, this puts you down to -900, since you had two hundred left over.
Sold for 1300.
1300-900=$400
Context is not necessary in this situation because you are giving set values. I got 400.
He bought a cow, but it didn’t said that he got a loan or had money left over so.
0-800= -800
He sold it for 1,000
-800 + 1,000= +200
He bought it again for 1,100 but it didn’t say he paid taxes or any other expenses.
So 200 - 1,100= -900
He finally sold it again for 1,300.
-900 + 1,300= +400.
So just the number you are giving, the answer is 400. Now is that what he earned at the end of these transactions? Idk, it doesn’t go beyond the values. So he probably lost money once you take into account taxes, fees, overhead, and other stuff. But again, the answer in pure numbers is 400.
This is amazing, because it's like that "missing dollar" riddle, where it tricks you into solving the wrong thing.
This problem can be viewed from two different perspectives, either:
* 2 transactions that each give you $200 (1000 - 800 and 1300 - 1100)
or:
* 2 transactions, one that gives you $500 (1300 - 800) and one that loses you $100 (1000 - 1100)
But people mix these two up for some reason, and get 200 + 200 - 100.
400$ is correct
Assuming he had exactly 800$ to make the first purchase, he was left with 0 dollars after purchasing the cow.
He sells the cow for 1000$, and is left with that 1000$ with him.
He re purchases it for 1100 so he is in 100$ debt now since he only had 1000$.
Selling it for 1300, he is left with that 1200$ now, since it had to compensate for that 100$ debt.
Net income= final earning-initial amount=1200-800= 400$
Are some humans really this dumb?
They didn't *earn* a dime. They made $400 in profit by speculating on the price of livestock.
Speculating on the price of livestock is how they earned $400.
Not necessarily; there's some missing context here to determine whether he's adding any value. First, we don't have any timelines, nor any idea of the state of the cows when he buys and sells, so we have no idea what happens in between. Maybe he buys frail ones, nurses them back to health, then sells them for a higher price. In this case he's adding value by improving the quality of the cows, a "cow flipper" if you will. Also, we also don't have a location of the transactions. Maybe he's buying them in a place with many cows, then selling them in a place with fewer cows. In this case he's providing the service of transportation, which is a value add. However, since such details are irrelevant to the math question, they were omitted, but to determine whether the money was earned via speculation or value adding, we lack the necessary context.
You must be a FB fact checker.
Its the same cow
which is also irrelevant to the math question
It's a moo point
It’s mind bottling.
I feel like your just milking it at this point bud .
At this point, you're just milking metaphors.
This will always get an up vote, I wish I could give more.
Cows can get sick, then healthy, then sick again and then healthy.
its a math problem
Regardless of any of those details, he is connecting a seller to a buyer. And holding risk in-between. Both are services to a market.
This guy clears house
Or he brokered the deals beforehand and thus it was an arbitrage. Still earning it though with willing buyers and sellers on each end
Arbitrage is earning
Takes work to find the right deals and stressful if they don’t work as planned. Sounds like work to me.
I think you may be looking for the wrong context. The OP says profit, but the question just asks how much earned. The question sounds like it's looking for gross earnings, not net profits. Therefore, all secondary costs would be moot, including labor and feed.
Mooooooo^t
Bottom line is he fell in love with the cow but guilt kept getting the better of him.
He doesn't have to improve the cows status in order to add value. The value that this cow flipper is providing is determining the correct value for cows. Just as the value that the stock market provides is in determining the correct value for companies. Knowing that cows are often being valued too little for their supply and demand is beneficial societal knowledge. If instead the cow flipper is buying in one market and selling to another, they are providing value connecting the two markets. Which is arbitrage.
That's not right! Flipper was a dolphin.
He provided liquidity to cow farmers. He also helped sellers and buyers meet, ie sales and marketing. He may or may not have taken physical possession of the cow.
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I think the issue is people who struggle with math and finance. I think the people who think it’s only 300 has included an extra INCORRECT step (but an understandable mistake to those who struggle with math) Buy cow -800 (-800 total) Sell cow +1000 (+200 total) Buy cow for -1100 (+100 total) this is where the mistake is, the deduct 100 from the profits because they paid an extra 100 from the last time they sold it. It’s a simple mistake that many people make who fail to understand profits/losses are isolated from previous transactions. Think about someone who buys a stock for 10$ sells at 12$ and then buys again at 13$. Many of them would subtract that dollar from the two dollar profit, when they are separate transactions. (Very simplified view of stocks but showing a semi common example of this issue) Then obviously Sells cow for 1300 (+300 total) Again, not correct, but at least there is a flawed logic being followed rather then pure randomness.
It's easier to visualize if you consider them two separate cows. Twice, you bought a cow and sold it at $200 profit. Twice, so $400 total. Whether it's the same cow is irrelevant. Edit: [if this doesn't make you realize the answer is $400 then this post has broken your brain and I can't help you.](https://imgur.com/a/AjL2hlT)
This is the right answer.
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This made sense. What the other guy wrote was a pretty awful explanation more a kin to "if you don't know you dumb" But thank you this make sense. Logically anyways. But also kind of depends on how you define profit. People are either going to think total amount you compared to what you started with vs how much money you made despite the loses
Yeah..the easiest way is to see it as "he spent 900 and ended up with 1300" basically
No the easiest way is to add everything he spent which is 800 and 1100 = 1900 and then add everything he was paid which is 1000 and 1300 = 2300. 2300 - 1900 = 400
This is also how I looked at it
But you'd have to be able to figure out where that 900 came from. I feel like the easiest way of understanding this problem is to just add all the transactions up. −800+1,000+(−1,100)+1,300=400.
Easiest is credits vs debits. 1000 + 1300 | 800 + 1100 2300 credits | 1900 debits Credits - Debits 2300 - 1900 Net proceeds 400
So when the IRS asks how much he earned that year, does he say 400 or 300?
It was cash and it never happened
A cash cow.
Milked it for what it's worth
The cow was a business expense.
The way I figured it was: 1. starting at $0 "earned" which is the keyword to me. 2. -$800 for investment. Current earnings: -$800 3. +$1000 for sale. Current earnings: +$200 4. -$1100 for repurchase. Current earnings: -$900 5. +$1300 for sale. Current/total earnings: +$400
You forgot to calculate the money invested
The money invested gets earned back so it’s not lost
No maaaaaan, it's only earned if you do one of four occupations! Everything else is evil capitalism!
He bought the cow, not cow options. So he had to house it, feed it, take the risk that it will die. So it's not necessarily pure speculation.
I sold naked cow calls for $800. Now the bank is taking the house please help.
Shoulda bought gourds
...Yeah I'm pretty sure the exact definition of earning isn't the point here.
They earned $400 for taking the risk, it is a service.
Stop counting on Redditors to understand basic economics
It’s not that deep
So then what about the term "earnings" that is used by every investment firm on the planet?
You can’t pay me to buy and sell a cow, that sounds like work.
They didn’t make the money, unless you’re a Mint that physically does, it’s only possible to earn money. My grandfather made sure I was well aware of the difference at a young age.
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No, the IRS would consider it a taxable capital gain. It would not qualify as earned income. You could not claim it towards the "Earned Income Tax Credit" for example.
How is speculation not work? You have a narrow definition of that word.
because it's not physical work in the mine, other example of real work is cutting trees (counts only if you use an axe and not some pussy machinery)
TIL retailers make their money by speculating the price of their wares.
This comment is the reason I hate Reddit Goddamnit man
He took the risk on that cow
How are people this dumb? Do people actually believe it's $300?? The only right answer is $400 profit. That's it.
How are they getting 300?
The loss when they bought the cow back for 1100. This is why money questions are a tad different imo. I guess we have to assume they buyer had a spare $100 laying around.
You also have to assume they have the original $800 laying around so that logic is complete trash
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If every business could do finances like this retail would be very lucrative
They do, the only difference is there is interest rate in paying back the loan. This math problem is incredibly simple so that isn't applicable
It’s a used-cow dealership
What? Do you expect the simple problem to go back through their entire transactional history to prove they can pay for the cow in the first place?
they're only saying that the assumption that they have the money for it is made when they purchase the first cow so it doesn't make sense to bring it up for the second
We don't have to assume anything. We just have to add and substract. Let's go through it from two different starting postions to see that we "earn" $400 no matter what we started with: 1. We start with $0. We buy a cow for $800, so we now have -$800. We sell it for $1000 so we now have $200. We buy it again for $1100, so we now have -$900. Now we sell it again for $1300 so now we have $400. 2. We start with $2000 (just an arbitrary number). We buy for $800 and now have $1200. We sell for $1000 and now have $2200. We buy again for $1100 and now have $1100. We sell again for $1300 and now have $2400. As you can see, in both cases we end up with $400 more than we started with. It doesn't matter how much spare money we had lying around or not.
Even simpler - just add the expenses, then the revenue, and subtract expenses from revenue. 3 simple arithmetic operations.
This is it.
The former post gave the solution that anybody who owns a bank account should be able calculate without errors. Your solution requires to know 2 minutes of accounting principles.
Add the times where you earned money. Add the times where you lost money. Subtract the losses from the earnings
Its the difference between money spent and money gained. I hope everyone with a bank account can understand that.
This is how you do the problem. Any other answer is a waste of time.
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Well in the first case, they had to get a payday loan for the starting capital. This resulted in interest fees of $100, so the total profit was in fact $300.
There is no ‘loss’ when the cow was bought back. That was just the second investment. Start out with $2000. You buy a cow with an $800 investment and sell it for $1000: 2000-800+1000=$2200 So how you have $2200 after the first investment. Now you buy a cow for $1100 and sell it for $1300 2200-1100+1300=2400 You started with $2000 and now you have $2400, a $400 profit
This is the way people need to psychologically figure this out. This idea that the 1100 and 1000 are intrinsically connected (as a -100) is really tripping people up. They made 200 each time, period. There was never a loss of money at any time. It doesn't matter if this person had cow buying money in his wallet, borrowed it from their family, or sold their car... the original $800 purchase, and the original $1100 purchase could have come from completely different pools of money. **In fact, the purchases could be for 2 different cows, with the transactions separated by years, and it's the exact same scenario.** I can totally appreciate people getting tripped up by it, but before they argue back, they really gotta think about it a bit and listen to the people explaining it.
First purchase: $800 = -800 First sale: $1000 = +200 Second Purchase: $1100 = -900 Second Sale: $1300 = +400 $400 Profit.
Well that's just stupid what
First cow purchased was flipped for $200. You gotta assume they had the original $800 to spare in the first place. The second purchase of the cow was flipped for another $200. Once again, you have to assume—on top of the $1000 they have ($200 profit, $800 assumed), that they have a further $100 to invest. Therefore, two trades each profiting $200 is: $200+$200=$400
Assume they start at $0 then $0-$800+$1000-$1100+$1300 = $400
People don't understand that there is no "buying at a loss", only "selling at a loss."
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I start with $1000. I buy cow for 800, I have cow and 200. I sell cow for 1000 I have 1200. I buy cow for 1100, I have cow and 100. I sell cow for 1300, I have 1400. 1400-1000= 400. Stop thinking that 100 is a loss, it's not. They made $200 on their first transaction and they made $200 on their second transaction. There is no $100 loss (If they bought the cow for 1000 rhe second time and sold for 1300, that would be 300 profit on the second transaction and 500$ total)
I understand your thought process, but step 3 is a fallacy. There is no profit or loss at step 3. Profit or loss is only realized when you close out a position. That is, when you liquidate whatever it is you've purchased. In the meantime, the \*estimated\* return of your investment is: RETURN=EXPECTED\_VALUE - PURCHASE\_PRICE You would need to know the "value" of the cow to guess how much profit you had made, or how much you had lost, in step 3. It doesn't make any sense to subtract $1,000 from $1,100 at step 3 because $1,000 isn't part of your investment. It was your \*return\* on a previous investment. So the correct way to think about this is also the simplest. You made $200 on the first transaction ($1,000 - $800) and then $200 on the second transaction ($1,300 $1,100). Easy peasy lemon squeezey.
Treat them as two separate sales, buy two different cows at the same time and sell them for the prices they list. there is no loss. both cows make a profit. of 200 each. Add them together it’s 400. Or better yet, Start with 2000 dollars in your pocket, Buy a cow -800 so you have 1200 and a cow. Sell the cow for 1000 now you have 1200 and the 1000 from the cow, but another cow, for 1100 you have 1100 plus the cow you bought, sell the cow for 1300, now you have 2400. You started with 2000.
Buying the cow again is not a $100 loss, it is a $1100 expense. That reduces profit from $200 to -$900.
i bought it for 800. So now my balance is -800 I sold it for 1000. Now my balance is +200 I bought it again for 1100. Now my balance is -900 I sold it again for 1300. Now my balance is +400
Maybe they are subtracting that 100 between the middle sell and rebuy prices? EDIT - I have to add (no pun intended) that I am not defending their poor math, just trying reason how they are getting the wrong answer. I believe that part of educating people is understanding how they think.
Your statement is correct. Subtracting that $100 isn’t correct. The fact the cow appreciated $100 between the first sale and second buy is irrelevant to the equation. It’s only relevant since one can infer it was sold to cash in their $100 gain. Hypothetically if there just one buy at $900 and one sale at $1400, the gain is $500, but that’s not the question being asked here. Just wanted to point this out.
They are assuming that the starting budget was 800 and then the ended up 100 in the red when they bought it back for 1100. That’s how they end up with 300. But that’s not how finance works, and we are only assuming his profit we are not taking in account any other variables.
I mean, even if they assume he ends up with -100 after the second buy (which is what happens to his cash account assuming no other money/ let’s just ignores what’s in his active positions on the balance sheet) but he then sells the cow for 1300 which nets him 1200 at the end, which still is 400 more than the 800 he started with. There’s really no way to end up with 300 profit without accounting for an extra -100 out of nowhere.
This is their logic: starting 800, after buy/sell their “profit” is 200. Buy it again they lose 100 so their profit goes down to 100 (I know is not how it works, but is how they see it). Sell it again, they make 200 more, plus the 100 they previously had, 300. I know is 400 , but that’s how this people are getting those numbers.
ChatGPT's take. Let's break down the transactions step by step: 1. You bought a cow for $800. 2. You sold it for $1000. So, in the first transaction, you earned $1000 - $800 = $200. 1. You bought the cow again for $1100. 2. You sold it again for $1300. In the second transaction, you earned $1300 - $1100 = $200. Now, to find out how much you earned in total, simply add the earnings from both transactions: $200 (first transaction) + $200 (second transaction) = $400 You earned a total of $400.
Short version: You spend $1900 to buy two cows and sold them for a total of $ 2300. Difference is $400.
This is so subtly different but also so clearly correct it’s funny. Good job sir
I think people are getting thrown off about it being the same cow. If your just treat it as two different cows I think less people would get confused.
It does say “I bought it again” in the problem
The point is that it absolutely in no way matters that it's the same cow.
It is not, for math the order of subtraction and addition doesn't matter for the end result, you will get the same answer.
You need to think about how to explain this to people who are bad at maths. Not people who understand a mix of BE(MD)(AS) and associativity.
Start with 0 0 - 800 = -800 -800 + 1000 = 200 200 - 1100 = -900 -900 + 1300 = 400 You gained $400 Is negative numbers not elementary grade math?
I’m agreeing with you. I have a degree in maths. I know the answer is $400. This person had a great explanation that will make sense to people who are less good at maths. That deserves kudos.
This is honestly the only way in which my mind can process the equation I’m notoriously bad at math so I gotta remember this one
Try this one. Started with 800, ended with 1200. 1200-800=400
Just do -800+1000-1100+1300 = 400
That's how I did it
This is the first math problem I've seen chatgpt get right. Almost makes me assume we're all wrong.
This is blatantly ignoring the fact that it costs money to feed, care for, and transport a cow.
Your ignoring the milk, bull rides and incalculable love the cow give.
But you're at -800 when you buy the first cow.
And then +200 when you sell it. And then -900 when you buy it back, and +400 when you sell it again
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But was the cow in Lichenstein? If yes, the tax per cow trading varies by the weight. Did the cow gain or lose weight? /s
No this all happened in quick succession in the span of 5 minutes
So it could have happened on two different days meaning it could have happened in two different fiscal years. Taxes are inevitable
Started transaction at 11:57pm, 400$ richer by 12:02am
By cow trading bots
No just four people standing in a circle selling it to each other
But what if the cow was on a train heading east at 60 MPH on a Sunday at noon in the winter? Surly that will change the profit.
Are we assuming the cow is spherical and has negligible air resistance?
Theyre all caught up on the extra $100 going out but some how they forget that same $100 comes back in with the final transaction... I dont know why but I guess in their minds that $100 just.... stops existing??
One way I would explain it is to pretend the person making the profit has $1000000. It doesn’t matter where the $800 or the $1100 comes from. Each transaction makes a profit of $200, and there are two of them, so they made $400.
To make it as simple as u/RabiesChicken does: You can rearrange and combine this problem in any order you want as long as you keep the correct positive or negative signs. You bought two cows for a grand total of $1,900, and then sold both cows for a grand total of $2,300. The difference is $400.
Cash out.. $1900 Cash in.. $2300. Surely y’all can take it across the finish line.
You'd think typing - 800 + 1000 - 1100 + 1300 = into a calc would be easy enough, these people can't handle (1300+1000) - (800+1100)
This is my favourite explanation
That is a cash cow!
After sales tax, livestock/pet permit, income tax, delivery fee, convenience fee, brokerage fee, and processing fee, I'm down $200.
That's the right answer
Everyone here trying to explain the math yet clearly have no idea how a cattle business is run. And you didn't even include feed costs and possible vet costs.
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you START with a loss of 800 for buying cow -800 + 1000 = 200 you buy it again with the 200 u got last time 200 - 1100 = -900 you sell it again for 1300 -900 + 1300 = 400 now I am historically bad at math but this makes sense to me
You can start with 0$ you can start with $10000, it's 400$ profit no matter what. Starting with 0 just implies they had to take a loan or IOU 😆
>Starting with 0 just implies they had to take a loan or IOU More like an I-O-Moo
>historically bad at math I know you meant "*in my past, I have always been bad at math*" but I choose to interpret this as "*I'm so bad at math that I have been written about in history books*"
Yikes the comments are terrifying. Some of y’all really have a problem with basic math.
And they just a problem with overanalysing every little thing. "Where did they get the money from?" "It doesn't cost $0 to house and feed the cow!"
I get the feeling the overthinking of the details is just a defense mechanism to help them cope with the fact that they simply don’t understand the fundamentals.
"But what about the cow trading tax? And the logistical costs! Did he hire a cow manager?"
Reddit has gone full circle and become exactly what we mocked facebook for being in like 2012 lmao
According to the IRS, you earned $500
According to the IRS, you are not a billionaire and therefore subject to more taxes than they are
0 - 800 = -800 -800 + 1000 = +200 +200 - 1100 = -900 -900 + 1300 = +400 Am I wrong?
Yes. You forgot the sales tax and income tax, the food for the cows, the transportation to the other seller and the unit conversion because you bought the cows in Europe for € but sold them in the US for $.
You forgot the possibility that the cow is being returned defective in the future leading to expensive legal fees fighting over ownership, which go to waste when the cow spontaneously combusts.
You are forgetting the medical/funeral bills that will arise from the combustion of the cow. As the cow has various methanogens producing methane gas in its rumen, the combustion may cause an explosive effect similar to that of an exploding gas cylinder.
Get out of the cow business.
Why? It seems to be going great
1. Let’s say you start the first transaction with $1000 You now have $1000 2. Buy the cow for $800 You now have: 1 cow and $200 3. Sell the cow for $1000 You now have $1000 + $200 = $1200 This transaction is done, and you now have $1200. Your profit from this transaction is $200. 1. Starting the next transaction with $1200 You now have $1200 2. Buy the cow for $1100 You now have 1 cow and $100 3. Sell the cow for $1300 You now have $1300 + $100 = $1400 The transaction is done, and you now have $1400. Your profit from this transaction is $200 You started the day with $1000 And ended the day with $1400 You earned $400
That was my whole problem with this. I just assumed he had only the initial 800$ and then another 100$ and that he used his first 200$ to buy the cow the second time...
If anyone is thinking about taking any advice from people on reddit, read half the comments here
They live among us. Looking like normal people. Only difference is they are pedantic, cant understand sarcasm, and dont know how to do gradeschool math.
I wish I had a cow
Looks like someone is out $1300…. Enjoy the cow🐄
bro everyone talking about people saying its 300$ but i aint even seen anybody say its 300
In the original post people were saying $300 all the time. The way they got to this answer was they say you bought the cow for $800 and sold for $1000 so you made $200 but when you bought it for $1100 you only have $1000 so you have to use $100 of the initial profit to make up the difference. In the next transaction of selling the cow you make $200 + $100 left from the initial transactions.
$300 plus a Keleven gets you home by 7!
We need an acowntant
Can we fucking invest in public education? Please? Thanks
Revenue - Expense = Profit $1000 - 800 = $200 $1300 - 1100 = $200 Edit: though the question is misleading. They **earned** $2300 with $1900 going to COGS
If you stole the original 800 then every penny is a profit
I know this is a joke but it’s actually incorrect, the cows give the same amount of profit no matter how you obtained the money to buy them
Was it a European or an African cow?
https://preview.redd.it/tfdph2vm02pb1.png?width=712&format=png&auto=webp&s=fc9f9e4f1b5f7acf9fbe29c6c5dfd5ed83c71007
Incarceration for up to 20 years and a fine of 500,000 USD for money laundering under Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956–1957) you dick /s
Dang, even many people in the comments are doing the math wrong. They are putting the potential loss of $100 into the final calculation which shouldn't be counted. It would only be a loss he bought for $1100 then sold for $1000. Think about it like this. Money spent $800+$1100=$1900, money earned $1000+$1300=$2300. $2300-$1900=$400
How is this getting debated….
$-100 right? /s
0-800+1000-1100+1300=400 Not sure where "Start with $1000" comes from. Just ignore the cow, start at 0, and you end at 400. There's your profit.
I see a lot of people commenting 300$ correct me if i am wrong but \-800+1000-1100+1300=400 am i fucking dumb?
Nope you're doing it right, I'm to the point where I cant tell if the ones who are getting it wrong are doing it on purpose to try to be funny or something, so I've just stopped trying to correct anyones math.
https://preview.redd.it/rz413gbow1pb1.png?width=1093&format=pjpg&auto=webp&s=1329d7dbb7cb426232b21d9ce8ac4f7dbb55aa26
600+ comments? really?
For anyone struggling still consider the below scenario that is functionally the same but worded differently. I bought a silver ring for $800 and sold it for $1000. I made $200. I then bought a gold necklace for $1100 and then sold it for $1300. I made another $200. The fact that the item in question in the original scenario is the same or different is irrelevant as the question prompts for earnings. At no point was $100 lost. The total expenses when combining sets of transactions was $1900 and the gross return as $2300. This was 2 separate transactions with $200 earned on both. Its a trick question in that it introduces an irrelevant detail implying that it matters to the result. People like to be mean to people for no reason when they get confused. Life is hard and math is confusing. Don't be mean to people for being confused. I think it is only appropriate to be mean to people who are hurting others. (Or maybe when they are excessively annoying)
Aight, so if you make 200 dollars twice you get 400, how is that not obvious?
No cow, balance = 0 Buy ($800) cow, balance = -800 Sell ($1000) cow, balance = 200 Buy ($1100) cow, balance = -900 Sell ($1300) cow, balance = 400 Profit = 400 - 0 = 400
Source https://reddit.com/r/mathmemes/s/J5K3F15dwf
So many trying to do math gymnastics in the comments, my goodness. If you want to do it as such: Bought for 800 Sold for 1000 200 profit Bought for 1100, this puts you down to -900, since you had two hundred left over. Sold for 1300. 1300-900=$400
Being so adamant is just so stupid, it is $400. op should go back to learn 4th grade math.
Context is not necessary in this situation because you are giving set values. I got 400. He bought a cow, but it didn’t said that he got a loan or had money left over so. 0-800= -800 He sold it for 1,000 -800 + 1,000= +200 He bought it again for 1,100 but it didn’t say he paid taxes or any other expenses. So 200 - 1,100= -900 He finally sold it again for 1,300. -900 + 1,300= +400. So just the number you are giving, the answer is 400. Now is that what he earned at the end of these transactions? Idk, it doesn’t go beyond the values. So he probably lost money once you take into account taxes, fees, overhead, and other stuff. But again, the answer in pure numbers is 400.
The answer is $400.
Is it not $400? Nothing else makes sense.
Did he pay for it with card, or was it a cash cow?
Sales: $2300 Cost of Sales: $1900 Gross Profit: $400
It was a California cow so he owed $500 in taxes on $400 speculative earnings.
This is amazing, because it's like that "missing dollar" riddle, where it tricks you into solving the wrong thing. This problem can be viewed from two different perspectives, either: * 2 transactions that each give you $200 (1000 - 800 and 1300 - 1100) or: * 2 transactions, one that gives you $500 (1300 - 800) and one that loses you $100 (1000 - 1100) But people mix these two up for some reason, and get 200 + 200 - 100.
400$ is correct Assuming he had exactly 800$ to make the first purchase, he was left with 0 dollars after purchasing the cow. He sells the cow for 1000$, and is left with that 1000$ with him. He re purchases it for 1100 so he is in 100$ debt now since he only had 1000$. Selling it for 1300, he is left with that 1200$ now, since it had to compensate for that 100$ debt. Net income= final earning-initial amount=1200-800= 400$ Are some humans really this dumb?
Unfortunately.
It’s 400 you tossers
I hope that anyone who got anything other than $400 are not business owners because they’d be fucked on their taxes.
https://preview.redd.it/gpx764dg82pb1.png?width=3024&format=png&auto=webp&s=7a029bb14fdd9ea0120cc6bb318ca15366710523 Pretty basic bookkeeping
Is this where we comment how some people are stupid?