Case Study-wilmu university
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Transcript of Case Study-wilmu university
7/28/2019 Case Study-wilmu university
http://slidepdf.com/reader/full/case-study-wilmu-university 1/3
7/28/2019 Case Study-wilmu university
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Paper 1: Sale of Hanby’s Inc. I had a buy sell agreement with my 2 partners and each year we
evaluated the company in case one or more wanted out. The remaining partners had first right of
refusal. In 2009 we valued the company at 1.5 million. Both of my partners were 67 in 2009 and
both decided as the economy was slowing down significantly that they wanted to retire. To buy
them out, I would have to borrow 1.2 million (pay them their share of the company and the cash
balance on hand). We were completely debt free at this time. WB wanted to purchase our
company for 20% more than our estimated value. They would also employ me. What would you
do.
My Opinion:
In a situation like 2009, where the economy was going down I would recommend getting out of
business. As the company is debt free, and the retaining partner has to borrow 1.2 million to pay
out the remaining partners, I would not recommend doing so as the market situations were not
encouraging. By agreeing to WB’s offer to purchase the company we would be able to get 20 %
more than what the company was worth. I would personally be benefited by accepting the offer
because they were offering a job and also would be getting my share of the Hanby’s Inc.
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Paper 2. Sale of a home: House is on the market for one day, and has 14 scheduled showings. 6
of these showings are on the first day, all of the showings would be with in 4 days. The house is
listed at $400,000. On the second day, before the seventh showing there are 2 offers on the
house. The first is a $405,000 cash offer, settlement in 50 days, with no contingencies except
basic inspection. The second offer is for $410,000 and they waived the appraisal contingency (in
other words if the house did not appraise for $410,000 the buyer would pay the cash difference).
The second offer was also willing to increase the offer up to $425,000 if there were other bidders
on the property. Settlement was to be in 60 days.
My opinion:
I would wait for the next 4 days , as the second buyer was interested in buying the house for
$410000 and is also ready to increase the offer up to $425000 in case of other bidders which
displays his extreme interest to buy the house. In case we find no other buyer in next four days
we already have a buyer so we would be in a safe position and in case we find one we have a
chance of receiving an additional amount of $20000