A woman bought a used car for $600 and sold it to a friend for $800. She later bought it back for $1,000 and resold it for $1,200. Did she make any profit and if so, how much?
Answer
$400
Explanation:
Profit on the first purchase:
$800 – $600 = $200 (i)
Profit on second purchase:
$1,200 – $1,000 = $200 (ii)
Profit she made on the two deals:
(i) + (ii) = $200 + $200 = $400
Cash Flow Analysis:
-$600 + $800 – $1000 + $1200 = +$400
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