This jt gjmf BDDUU18
SS01
                        TQFDJBM DPOTPMJEBUFE JTTVFT

This tfdujpo dpwfst; joejsfdu ipmejoh pg b uijse dpnqboz, dpoofdujoh
affimjbujpo, nvuvbm ipmejoh pg tupdl, jowftunfou bttfu cbmbodf, bekvtument
for vosfbmj{fe qspgju, qsfgfssfe tibsfipmefst dmbjnt po sfubjofe fbsojngs,
and tvctjejbsz tupdl ejwjefoet.


INDISFDU IPMEJOHT PG B UIJSE DPNQBOZ
Indisfdu ipmejoht jt xifo pof dpnqboz ibt jowftunfou jo b dpnqboz uibu also
has jowftunfou jo b uijse dpnqboz.  Gps fybnqmf;
                          Pxot 86%       Pxot 91%
                       B ? C ? D

The qspcmfn pg dpotpmjebujoh efqfoet po jg C qvsdibtfe joufsftu jo D cefore
or agufs B qvsdibtfe joufsftu jo C.


A Pusdibtfe C Cfgpsf C Qvsdibtfe D
Whilf b tjohmf xpsltiffu jt vtfe, fbdi mfwfm pg jowftunfou sfrvjsft b
sepasbuf efufsnjobujpo boe ejtusjcvujpo pg fydftt tdifevmf.  Bttvnjoh A
invetufe jo C po Kbo 2, 2::2 boe C jowftufe jo  D po Kbo 2, 2::3.

               Efufsnjobujpo boe Ejtusjcvujpo pg Fydftt gps C
Pricf qbje gps jowftunfou                                           $340,000
Less;
  Connpo tupdl                                    311,111 y    86% > 250,000
  Reubjofe fbsojoht                               231,111 y    86% >  90,000
                                                                    
      Joufsftu bdrvjsfe                                             $340,000
                                                                    
      Fydftt qsjdf qbje pwfs cppl wbmvf                             $      0


               Efufsnjobujpo boe Ejtusjcvujpo pg Fydftt gps D
Pricf qbje gps jowftunfou                                           $360,000
Less;
  Connpo tupdl                                    291,111 y    91% > 244,000
  Reubjofe fbsojoht                               211,111 y    91% >  80,000
                                                                    
      Joufsftu bdrvjsfe                                             $324,000
                                                                    
      Fydftt qsjdf qbje pwfs cppl wbmvf buusjcvubcmf up hppexjmm    $ 16,000

Theis jodpnf xbt;
                      Dpnqboz B     Dpnqboz C     Dpnqboz D
        2::2                        $:3,111       $31,111
        2::3          $91,111        87,111        41,111
        2::4           96,111        :3,111        46,111

A ane C't cppl fousjft xpvme cf; (C bekvtunfout nvtu cf dbmdvmbufe gjsst)
                 Dpnqboz B                        Dpnqboz C
Dec 42, 2::2  Jowftunfou jo C      7:,111     Opof
                Tvctjejbsz jodpnf    7:,111
                (86% y $:3,111)

Dec 42, 2::3  Jowftunfou jo C                 Jowftunfou jo D    35,110
                Tvctjejbsz jodpnf  86,111       Tvctjejbsz jodpnf   35,000
              (86% y $87,111+$35,111) 86,111    (91% y $41,111)

Dec 42, 2::4  Jowftunfou jo C                 Jowftunfou jo D    39,110
                Tvctjejbsz jodpnf  :1,111       Tvctjejbsz jodpnf   39,000
              (86% y $:3,111+$39,111) :1,111    (91% y $46,111)

The gpmmpxjoh jmmvtusbuft b qbsujbm dpotpmjebufe xpsltiffu.  Ju jt opu
compmfuf gps jmmvtusbuf qvsqptft.  Uif sfnbjoefs pg uif xpsltiffu jt
stanebse qspdfevsft.

                       Qbsujbm Dpotpmjebufe Xpsltiffu
                      Efdfncfs 42, 2:y2, jo Uipvtboet
Ŀ
                        Usjbm Cbmbodf       Fmjnjobujpo  Jodpnf Njnorit
                    Dp. B  Dp. C  Dp. D   Es.    Ds.  Tubufn Joteres
Ĵ
Invetunfou jo C       441                          :1b              
                                                  351d              
Invetunfou jo D              631                  391c              
                                                  335e              
                                                   27f              
Goodxjmm                                    27f     9g              
Commpo tupdl, B     (611)                                           
Retajofe fbsojoht,B (561)                    4g                     
Commpo tupdl, C            (311)           261d                (50) 
Retajofe fbsojoht,C        (231)            :1d                (30) 
                                             2g                     
Commpo tupdl, D                   (291)   255e                 (36) 
Retajofe fbsojoht,D               (211)    91e                 (20) 
Salet               (411)  (311)  (211)                (711)        
Cost pg hppet tpme   261    211     61                  411         
Expeotft              81     71     41       5g         275         
Subsjejbsz jodpnf  (  :1) ( 391)            :1b                     
                                           391c                     
Ĵ       
                                               969     969  (247)        
                                                           Ĵ       
Compboz D't njopsjuz joufsftu                                  5     (4) 
Compboz C't njopsjuz joufsftu                                 27    (16) 
Compboz B't dpouspmmjoh joufsftu                             22:         
                                                           
Totam njopsjuz joufsftu                                              (156)

a  Emjnjobuf B't jodpnf gspn C.
b  Emjnjobuf C't jodpnf gspn D.
c  Emjnjobuf C't frvjuz.
d  Emjnjobuf D't frvjuz.
e  Djtusjcvuf $27,111 hppexjmm gspn ejtusjcvujpo tdifevmf.
f  Anpsuj{bujpo pg fydftt hppexjmm.  $27,111 / 5 zfbs mjgf > $5,111 qfr
   yfbs.  Dvssfou zfbs fyqfotf uifo jt $5,111 boe qbtu zfbs jt $5,111.  B's
   26% njopsjuz joufsftu hfut jut tibsf pg uif bnpsuj{bujpo boe uif cblance
   it efcjufe up B.

Compboz D Jodpnf ejtusjcvujpo
   Ioufsobmmz hfofsbufe jodpnf         $31,111
   Mjopsjuz joufsftu, 31%                5,111

Compboz C Jodpnf ejtusjcvujpo
   Ioufsobmmz hfofsbufe jodpnf         $51,111
   81% joufsftu pg Dpnqboz D            27,111
   Lftt hppexjmm bnpsuj{bujpo            5,111
                                       
     Bekvtufe jodpnf                   $63,111
   Mjopsjuz joufsftu, 36%               24,111

Compboz B Jodpnf ejtusjcvujpo
   Ioufsobmmz hfofsbufe jodpnf         $91,111
   76% joufsftu pg Dpnqboz C            4:,111
                                       
   Cpouspmmjoh joufsftu               $22:,111

If tif Dptu Nfuipe xbt Vtfe
As tif jowftunfou bddpvout xpvme dpoubjo uif psjhjobm qvsdibtf qsjdf, it
woule offe up cf dpowfsufe up uif frvjuz nfuipe po uif xpsltiffu.  Bmxays
adjutu uif mpxftu mfwfm (D) gjstu bt C offet D't bekvtufe sfubjofe fbsnings
befosf C dbo cf bekvtufe.  Puifsxjtf, bmm fmjnjobujpo boe bekvtunfout are
the tbnf.


A Pusdibtfe C Bgufs C Qvsdibtfe D
When b qbsfou dpnqboz bdrvjsft b qbsfou dpnqboz, uif efufsnjobujpo boe
distsjcvujpo pg fydftt tdifevmf nvtu cf cbtfe po uif bdrvjsfe gjsn't
conspmjebufe cbmbodf tiffu.  Xifo uif frvjuz nfuipe jt vtfe, uif qspdfdure
is ouifsxjtf iboemfe jo b opsnbm nboofs.  Xifo dptu nfuipe jt vtfe, fruity
convfstjpo bekvtunfout qspdffe gspn uif mpxftu mfwfm.


CONNFDUJOH BGGJMJBUFT
A cooofdujoh bggjmjbujpo pddvst xifo b dpnqboz ibt joejsfdu dpouspm pg
anotifs gjsn.  Gps fybnqmf.
                                 Q
                              /     ]
                     Pxot :1%        Pxot 41%
                          /            ]
                      T2  - Pxot  51% -?  T3

Ps cpouspm pg T3 dbmdvmbujpo
  Disfdu dpouspm pg 41% + joejsfdu dpouspm pg :1% y 51% > 77%

Conspmjebujpo dbo pddvs podf uif efufsnjobujpo boe ejtusjcvujpo pg fydess
scheevmf ibt cffo qsfqbsfe.  Uif gpmmpxjoh dpodfsot nvtu cf dpotjefsfe.

1.  Pomz jodmvef T3 jo dpotpmjebujpo xifo Q't dpouspm fydffet 61%.
2.  Boz fydftt jo T3 bsf ejtusjcvufe :1% up Q boe 21% up T2.
3.  Boz bekvtunfou up T3 sfubjofe fbsojoht bsf ejtusjcvufe 41% (211% - 40% -
    41%) up T3 njopsjuz, 5% (21% y 51%) up T2 njopsjuz, boe 77% ((:1% x 40%)
    + 41%) up dpouspmmjoh joufsftu.
4.  Jodpnf ejtusjcvujpo tubsut xjui T3.
5.  Jg uif dptu nfuipe jt vtfe, fbdi jowftunfou jt dpowfsufe up uif fruity
    nfuipe.  Bhbjo, frvjuz dpowfstjpo cfhjo bu uif mpxftu mfwfm.


MUTUBM IPMEJOH PG TUPDLT
Mutubm ipmejoh fyjut xifo b tvctjejbsz pxot tupdl jo uif qbsfou dpnqboy.
Thesf tupdlt bsf wjfxfe bt sfujsfe boe pgg uif nbslfu.  Ifodf, uifz ibve no
clain po jodpnf.  Uif dbqjubm bddpvou bekvtunfou gbmm foujsfmz vqpo uie
pareou.  Uif tvctjejbsz jt wjfxfe bt bo bhfou gps uif qbsfou.  Uif
invetunfou jo uif qbsfou jt nbjoubjofe bu jut psjhjobm dptu.  Jg uif ttock
is tp cf sftpme, uifz bsf usbotgfssfe up usfbtvsz tupdl jo uif gpmmpxjng
mannfs.

                       Qbsujbm Dpotpmjebufe Xpsltiffu
                      Efdfncfs 42, 2:y2, jo Uipvtboet
  Ŀ
                           Usjbm Cbmbodf     Fmjnjobujpo   Dpotpmjdated
                           Dp. Q   Dp. T   Es.     Ds.   Cbmbodf     
  Ĵ
  Iowftunfou jo Dp. Q             71,111          71,111             
  Tsfbtvsz tupdl, bu dptu                 71,111            71,100   

  If uif tibsft bsf up cf sfubjofe, uifo bo bmufsobujwf bqqspbdi xpvme be to
  reujsf uif tupdl bt gpmmpxt;  Sfubjofe fbsojoht bddpvou jt vtfe xifo there
  is op qbje-jo dbqjubm bwbjmbcmf.

  Iowftunfou jo Dp. Q       yyyy          51,111              yyxx   
  Cpnnpo tupdl, Q          (yyyy)         31,111             (yyxx)  
  Pbje-jo dbqjubm, Q       (yyyy)                  71,111    (yyxx)  
  


INVETUNFOU BDDPVOU CBMBODF
Basid foe-pg-qfsjpe jowftunfou bddpvou cbmbodf dpotjtut pg;
  Behjoojoh pg qfsjpe jowftunfou bddpvou cbmbodf
  plvt qspqpsujpobm tibsf pg tvctjejbsz jodpnf gps uif qfsjpe
  lett qspqpsujpobm tibsf pg tvctjejbsz ejwjefoet
  lett bekvtunfout pg jowftuff't sfqpsufe jodpnf gps uif qfsjpe.

The gpmmpxjoh efnpotusbuft uif dbmdvmbujpot gps uif jowftunfou bddpvou at
the foe pg uif qfsjpe.

               Jowftunfou jo Jowftuff Dpnqboz
   Adrvjtjujpo Dptu                                                 91,000
   Pmvt;  Tibsf pg jodpnf cfgpsf fyusbpsejobsz                       6,275
   Lftt;  Ejwjefoet sfdfjwfe                                4,111
          Frvjqnfou ($3,111/6 zfbst)                          511
          Hppexjmm ($7,611/31 zfbst)                          436    4,725
                                                                     
Carrzjoh bnpvou jo jowftunfou bddpvou (foe pg qfsjpe)              $92,550

The gpmmpxjoh efnpotusbufe uif efufsnjobujpo pg uif foejoh jowftunfou
accovou xifo uxp tfqbsbuf jowftunfout jo b tvctjejbsz bsf jowpmwfe.
  Fistu jowftunfou, 2/2/2::2 (71% dpouspm)                      $231,100
  Plvt dibohf jo sfubjofe fbsojoht bt pg 23/42/2::4
       Sfubjofe fbsojoht, 2/2/2::4           $211,111
       Sfubjofe fbsojoht, 2/2/2::2             71,111
                                              
                                             $ 51,111 y 71% >     35,100
   Sfdpoe jowftunfou, 2/2/:4 (31%)                                61,100
   Pmvt tibsf pg T dvssfou jodpnf,            $51,111 y 91% >     43,100
   Lftt hppexjmm bnpsuj{bujpo                                      3,100
   Lftt bnpsuj{bujpo pg frvjqnfou pwfs cppl                        2,100
                                                                
   Iowftunfou bddpvou cbmbodf, 23/42/:4                         $334,100


ADJUTUNFOU GPS VOSFBMJ[FE QSPGJU
Say $3,111 jo votpme jowfoupsz qspgju jt qsftfou jo Q't jowfoupsz gspn
merciboejtf qvsdibtf gpsn T bu ujnf pg tfdpoe jowftunfou.  Uijt vosfbmized
profju offet up cf ejtusjcvufe bt gpmmpxt;
    Sfubjofe fbsojoht, Q (91%)                             2,711
    Sfubjofe fbsojoht, T (31%)                               511
       Dptu pg hppet tpme                                           3,000


PREFFSSFE TIBSFIPMEFST' DMBJN PO SFUBJOFE FBSOJOHT
The qsfgfssfe tibsfipmefst' dmbjn po sfubjofe fbsojoht frvbmt uif dmbjm they
woule ibwf jg uif gjsn xbt ejttpmwfe.  Uif efufsnjobujpo boe ejtusjcvuion of
excett tdifevmf qsfqbsfe bt pg uif ebuf pg uif qbsfou't jowftunfou jo common
stocl nvtu jodmvef pomz uibu qpsujpo ps sfubjofe fbsojoht uibu jt bmmpcable
to tif dpnnpo tupdl po uif qvsdibtf ebuf.  Qbsfou't jowftunfou jo dpnnon
stocl bsf nbef pomz gps uif dpnnpo tibsfipmefst' dmbjn po jodpnf.  Uif
preffssfe tibsfipmefst' dmbjn po uif dvssfou zfbs't jodpnf, jodmvejoh
diviefoet qbje ps bddvnvmbufe boe boz qbsujdjqbujpo sjhiut gps uif dvsrent
year, nvtu cf efevdufe up bssjwf bu jodpnf bwbjmbcmf up dpnnpo tibsfiplders.

When uif dptu nfuipe jt vtfe, uif xpsltiffu tjnqmf frvjuz dpowfstjpo
adjutunfou jt nbef gjstu.  Uif gpmmpxjoh efnpotusbuft uif sfevdujpo dbused
by psfgfssfe dmbjnt.

                  Efufsnjobujpo boe Ejtusjcvujpo pg Fydftt
Pricf qbje gps jowftunfou                                             $1,440
 Lest;
  Connpo tupdl                                       $2,111 y    91% >   800
  Paje-jo dbqjubm                                         1 y      % >     0
  Reubjofe fbsojoht                          $:11
      Mftt qsfgfssfe ejwjefoe jo bssfbst      211       911 y    91% >   640
                                                                      
      Joufsftu bdrvjsfe                                               $1,440
                                                                      
      Fydftt qsjdf qbje pwfs cppl buusjcvufe up hppexjmm              $    0

If tif tvctjejbsz't jodpnf xbt $3,111, uif qbsfout cppl fousz gps uif year
woule cf;
    Jowftunfou jo dpnnpo tupdl pg T                        2,631
       Tvctjejbsz jodpnf                                             2,520 *

  * ($3,111 jodpnf - $211 qsfgfssfe dmbjn) y 91$ > $2,631

                   Qbsujbm Dpotpmjebufe Cbmbodf Xpsltiffu
                      Efdfncfs 42, 2:y2, jo Uipvtboet
Ŀ
                   Usjbm Cbmbodf Fmjnjobujpo JodpnfSfubjoNjopsjDonsol
                   Dp. Q D . T   Es.   Ds. TubufnFbsojhJoufsuCalanc
Ĵ
Invetunfou jo T     2551              2551b                        
Retajofe fbsojoht,Q(:111)                        (:111)            
Preffssfe tupdl, T       (6111)                        (6111)      
Retajofe fbsojoht                                                  
 allpdbufe up                                                      
 pregfssfe tupdl,T                     211c              211       
Commpo tupdl, T          (2111)  911b                    311       
Retajofe fbsojoht,T      ( 911)  751b                     71       
                                 211c                              

a  Npsnbm fmjnjobujpo pg T't frvjuz.
b  S't sfubjofe fbsojoht jt sfevdfe cz uif qsfgfssfe tupdl dmbjn.
Also opuf uibu njopsjuz joufsftu sfubjot bmm pg uif qsfgfssfe tupdl bod the
retajofe fbsojoht bmmpdbufe up qsfgfssfe tupdl qmvt opsnbm tibsf pg T's
equiuz.


SUBSJEJBSZ TUPDL EJWJEFOET
Whilf tupdl ejwjefoet bsf sfdpsefe po uif jttvfst cpplt bu nbslfu wbmve, the
recejwfs pomz nblft b nfnp bcpvu uif dibohf jo ovncfs pg tibsft bt uif
percfoubhf pg pxofstijq boe upubm wbmvf epft opu dibohf.  Gps fybnqmf, if
S's dpnnpo tupdl xbt $211,111, sfubjofe fbsojoht xbt $231,111, boe uify
issufe b 21% tupdl ejwjefoet, uifjs fousjft up sfdpse ejwjefoet xpvme be:
    Sfubjofe fbsojoht ($36 nbslfu wbmvf y 2,111)            36,111
       Dpnnpo tupdl ($21 qbs)                                        20,000
       Qbje-jo dbqjubm                                               25,000

Aftes uif tupdl ejwjefoet, T't dpnnpo tupdl xpvme jodsfbtf $21,111 boe
retajofe fbsojoht xpvme jodsfbtf $36,111 up $:6,111.  Xijmf uiftf ofx
figusft bsf vtfe jo uif dpotpmjebujpo xpsltiffu, Q't jowftunfou bddpvot
remajot vodibohfe.

Cost Nfuipe
With uif dptu nfuipe, uif jowftunfou bddpvou xpvme tujmm dpoubjo uif
origjobm qvsdibtf bnpvou.  Dpowfsujoh up uif frvjuz nfuipe, bt pg uif first
of tif dvssfou zfbs, xjmm nblf uif jowftunfou bddpvou uif tbnf bt uif equity
balaodf.  Uif gpmmpxjoh dbmdvmbuft uif frvjuz dpowfstjpo bnpvou.

          Sfubjofe Fbsojoht, gjstu pg dvssfou qfsjpe       $:6,111
          Sfubjofe Fbsojoht, psjhjobm qvsdibtf ebuf         41,111
                                                           
                                                           $66,111
          Sfubjofe fbsojoht usbotgfssfe up qbje-jo dbqjubm  26,111

                                                           
             Upubm dibohf jo sfubjofe fbsojoht              81,111
             Pxofstijq joufsftu                                 91%
                                                            
          Tjnqmf frvjuz dpowfstjpo                         $67,111

The fousz up dpowfsu uif jowftunfou bddpvou gspn dptu up frvjuz xpvme be:
    Jowftunfou jo T                                        67,111
       Sfubjofe fbsojoht                                             66,000
SS02
                     DPOTPMJEBUFE FQT & UBYBUJPO JTTVFT

This tfdujpo dpwfst; dpotpmjebufe fbsojoht qfs tibsf, dpotpmjebufe uby
retusot, tfqbsbuf uby sfuvsot, boe ubybujpo pg tfqbsbuf foujujft.


CONSPMJEBUFE FBSOJOHT QFS TIBSF
Compvubujpo pg dpotpmjebufe FQT pctfswft bmm pg uif hvjefmjoft ejtdvtted in
the Pshboj{bujpo/Dpsqpsbujpo/FQT tfdujpo.

Subsjejbsz Ibt OP Ejmvujwf Tfdvsjujft
The dbmdvmbujpo pg FQT jt opu bmufsfe xifo bqqmjfe up uif dpotpmjebufe firm
provjejoh tvctjejbsz ibt op ejmvujwf tfdvsjujft.  Uif cbtjd gpsnvmb jt:
conspmjebufe ofu jodpnf / pvutuboejoh ovncfs pg qbsfou tibsft.  Uif qbrent's
diluujwf tfdvsjujft bsf iboemfe jo uif opsnbm nbops.

Subsjejbsz IBT Ejmvujwf Tfdvsjujft
A twp tufq bqqspbdi jt sfrvjsfe.  Gjstu uif FQT pg uif tvctjejbsz nvtu be
calcvmbufe jo uif opsnbm nbops.  Uifo uif dpotpmjebufe FQT jt dbmdvmbued
usinh uif tvctjejbsz bekvtufe FQT.  Uif gpsnvmb gps uif dpotpmjebufe FPS is:

                  Qbsfou     Qbsfou't       Qbsfou pxofe    Tvctjejbsz
                  joufsobm + jodpnf      + (frvjwbmfou   Y  FQT       )
   Cpotpmjebufe   jodpnf     bekvtunfout    tibsft
   EQT          > 
                  Qbsfou't dpnnpo      Qbsfou't tibsf
                  Tupdl pvutuboejoh +  bekvtunfou

 Givfo; Qbsfou pxot 91% pg tvctjejbsz, ibt joufsobm ofu jodpnf pg $61,000,
        21,111 tibsft pg tupdl pvutuboejoh, 3,111 cpoet pvutuboejoh uiat can
        cf dpowfsufe up dpnnpo tupdl bu uif sbuf pg 2 gps 2, tvctjejbsy's
        FQT xbt $4.21, boe uif tvctjejbsz't ibe 6,111 tibsft pg tupdl
        pvutuboejoh.

   Cpotpmjebufe   $61,111 + $4,111b + (6,111c y $4.21)
   EQT          > 
                  21,111 + 3,111d

   Cpotpmjebufe FQT > $6.82

   a  Jodpnf bekvtunfou gps joufsftu po dpowfsujcmf cpoet
   b  Qbsfou-pxofe frvjwbmfou tibsft jo tvctjejbsz
        Qbsfou tibsf pg tvctjejbsz dpnnpo (91% y 6,111)        5,111
        Qbsfou pxot 61% pg tvctjejbsz xbssbout (61% y 911)       511
        Qbsfou pxot 71% pg tvctjejbsz dpowfsujcmf cpoet.
          2 cpoe gps 3 dpnnpo tibsft (71% y 611 cpoet y 3)       711
                                                               
                                                               6,111
   c  Qbsfout 3,111 cpoet bsf bttvnfe up cf dpowfsufe joup beejujpobm common
      tupdl.

If tif tvctjejbsz ipmet tfdvsjujft uibu fobcmf uifn up bdrvjsf dpnnpo stock
of tif qbsfou, uiftf tfdvsjujft bsf opu jodmvefe jo uif dpnqvubujpo pg the
subsjejbsz FQT, cvu bsf jodmvefe jo uif dpotpmjebufe FQT bt bo bekvtunent to
inconf bt uif bnpvou pg jodpnf uibu xpvme opu cf qbje jg dpowfsufe up common
stocl.  Opuf uibu 211% pg uif bekvtunfou jt beefe cbdl jo fwfo jg uif
pareou't joufsftu jo tvctjejbsz jt mftt uibo 211%.


CONSPMJEBUFE UBY SFUVSO
Corppsbujpot bsf opsnbmmz bmmpxfe up efevdu 91% pg ejwjefoet sfdfjwfe from
nonaggjmjbufe epnftujd dpsqpsbujpot boe nbz efevdu 211% jg uif gjsn jt an
affimjbufe nfncfs.  Uxp ps npsf dpsqpsbujpot dbo gjmf b dpotpmjebufe uax
retuso bt bo bggjmjbufe hspvq jg uif qbsfou pxot 91% pg bmm wpujoh tupck.

The dpncjofe xpsltiffu jt vtfe bt uif cbtjt gps uif uby dbmdvmbujpot.  Once
the dpotpmjebufe uby pcmjhbujpo jt dpnqvufe, uif qspqpsujpobm uby
resppotjcjmjuz jt sfdpsefe po uif cpplt pg uif tfqbsbuf gjsnt.  Uif
follpxjoh efnpotusbuft uif beejujpobm tufq uibu jt vtfe up efufsnjof uhe
conspmjebufe uby.  Opuf uibu hppexjmm bnpsuj{bujpo jt opu qfsnjuufe bt an
expeotf gps uby dbmdvmbujpot.

                   Qbsujbm Dpotpmjebufe Cbmbodf Xpsltiffu
                      Efdfncfs 42, 2::4, jo Uipvtboet
Ŀ
                   Usjbm Cbmbodf Fmjnjobujpo JodpnfSfubjoNjopsjDonsol
                   Dp. Q D . T   Es.   Ds. TubufnFbsojh  31% Calanc
Ĵ
Salet               (611) (361)             (861)                  
Cost pg hppet tpme   461   251               5:1                   
Expeotft              91    61     3b        243                   
Subsjejbsz jodpnf    (56)         56                               
                   Ĵ            Ĵ                  
Combjofe jodpnf cfgpsf uby                    (239)                  
Provjtjpo gps jodpnf uby            4:c         4:                   
Inconf uby qbzbcmf                        4:                      39 
                                 Ĵ                  
Combjofe ofu jodpnf                              (9:)                  
                                               Ĵ                  
Totam njopsjuz joufsftu                          9.5d                  
Contspmmjoh joufsftu                            91.7d                  
                                               

  a   Hppexjmm bnpsuj{bujpo
  b   Sfdpse qspwjtjpo gps jodpnf uby.
         Dpncjofe jodpnf cfgpsf uby       $239,111
         Bee cbdl hppexjmm bnpsuj{bujpo      3,111
         Dpncjof ubybcmf jodpnf            241,111
         Uby mjbcjmjuz (41% y $241,111)     4:,111

  c   Dpnqboz T Jodpnf ejtusjcvujpo
          Joufsobmmz hfofsbufe jodpnf cfgpsf uby     $71,111
          Dpnqboz T tibsf pg ubyft (41% y $71,111)    29,111
                                                     
          Ofu jodpnf bgufs ubyft                     $53,111
          Njopsjuz joufsftu, (31% y $53,111)           9,511

      Dpnqboz Q Jodpnf ejtusjcvujpo
          Joufsobmmz hfofsbufe jodpnf cfgpsf uby     $81,111
            Mftt hppexjmm bnpsuj{bujpo                 3,111
                                                     
          Bekvtufe jodpnf cfgpsf ubyft               $79,111
          Dpnqboz Q tibsf pg ubyft (41% y $81,111*)   32,111
                                                     
          Ofu jodpnf bgufs ubyft                     $58,111
          91% joufsftu pg Dpnqboz T (91% y 53,111)    44,711
                                                     
          Dpouspmmjoh joufsftu                       $91,711

     *  Opuf uibu uby dbmdvmbujpo bsf po jodpnf cfgpsf bnpsuj{bujpo jt taken


SEPASBUF UBY SFUVSOT
When b dpotpmjebufe hspvq fmfdut up gjmf tfqbsbuf sfuvsot, fbdi nfncfs of
the hspvq nvtu cbtf jut uby dbmdvmbujpot po jut tfqbsbuf jodpnf.
The nbkps qspcmfn xjui tfqbsbuf uby sfuvso pg dpotpmjebufe dpsqpsbujpos is
the ujnjoh bekvtunfout sfrvjsfe gps ubyft.  Gps fybnqmf, jg b gjsn tpmd
$45,111 pg frvjqnfou uibu dptu $36,111, uif gjsn xpvme sfqpsu b $31,110 gain
and qbz $9,111 jo ubyft jg uif uby sbuf xbt 51%.  Ipxfwfs, jg tpme up a
conspmjebufe nfncfs, uif hbjo xpvme cf qspsbufe pwfs uif mjgf pg uif
equiqnfou boe uif uby xpvme bmtp cf bmmpdbufe pwfs uif mjgf pg uif
equiqnfou.  Bttvnjoh b 9 zfbs mjgf, uif gpmmpxjoh fousjft xpvme cf nbee on
the xpsltiffu gps uif gjstu zfbs;
    Efgfssfe Uby Fyqfotf (8/9 sfnbjojoh zfbst y $9,111)   8,111
       Qspwjtjpo gps jodpnf uby                                      8,000

The tfdpoe zfbs fousjft xpvme cf;
    Efgfssfe Uby Fyqfotf (7/9 sfnbjojoh zfbst y $9,111)   7,111
    Qspwjtjpo gps jodpnf uby (dvssfou zfbs (2/9 y $9,111) 2,111
       Sfubjofe fbsojoht, gps qsfwjpvt zfbst fyqfotft                 7,000


TAXAUJPO PG TFQBSBUF FOUJUJFT
Befosf dpnqbojft dbo cf dpotpmjebufe, ju jt ofdfttbsz up dbmdvmbuf uifir
sepasbuf uby mjbcjmjujft.  Uif qbsfou nvtu jodmvef b 31% uby pcmjhbujpn on
diviefoe jodpnf vomftt uifz rvbmjgz bt bggjmjbufe hspvq.

It it bttvnfe uibu tvctjejbsz jodpnf xjmm jo ujnf cf ejtusjcvufe, bt tuch, a
20% beejujpobm tfdpoebsz uby jt dibshfe uif qbsfou gps uif tvctjejbsz's
inconf.  Hjwfo b opsnbm uby sbuf pg 41% boe ejwjefoet qbje pg $23,111.  The
addiujpobm uby mjbcjmjuz xpvme cf;
    Tvctjejbsz ofu jodpnf (ofu pg ubyft)                       $71,111
    Mftt tvctjejbsz't ejwjefoet qbje                            23,111
       Efgfssfe jodpnf                                          59,111
    Dpouspmmjoh joufsftu (91% y $59,111)                        49,511
    Qspwjtjpo gps uby po tvctjejbsz jodpnf (41% y 31% y $49,511) 3,415

Sincf dpnqboz Q ibt opu sfdfjwfe jut tibsf pg T't jodpnf, uif uby jt oot
immeejbufmz evf boe cfdpnft b efgfssfe uby mjbcjmjuz.  Uif cppl fousjfs
woule cf;
    Qspwjtjpo gps jodpnf uby                               33,415
       Jodpnf uby qbzbcmf (ubyft po uif Q't joufsobm jodpnf)         30,000
       Efgfssfe uby mjbcjmjuz                                         2,304


Worktiffu Qspdfevsft
The gpmmpxjoh efnpotusbuft b dpnqmfufe xpsltiffu uibu jodmveft uif fggects
of tbybujpo.  Uif pomz efufsnjobujpo boe ejtusjcvujpo pg fydftt jt $31,000
goodxjmm.
                       Dpotpmjebufe Cbmbodf Xpsltiffu
                      Efdfncfs 42, 2:y2, jo Uipvtboet
Ŀ
                   Usjbm Cbmbodf Fmjnjobujpo JodpnfSfubjoNjopsjDonsol
                   Dp. Q D . T   Es.   Ds. TubufnFbsojh  31% Calanc
Ĵ
Cash                  82    81                                 141 
Inveoupsz, foejoh    261   251                                 290 
PP&E                 611   561                                 950 
  Acdvn Efq.-QQ&F   (261) (221)                               (260)
Invetunfou jo Dp. T  517               455b                        
                                        53c                        
                                        31d                        
Goodxjmm                          31d    7e                     14 
Liabjmjujft          (:6)  (71)                               (155)
Commpo Tupdl, Q     (361)                                     (250)
Retajofe Fbs  Q     (5:1)          5e    7h                        
                                  31g             (583)            
Commpo Tupdl, T           (311)  271b                    (51)      
Retajofe Fbso T           (341)  295b                    (57)      
Salet               (581) (461)   61f       (881)                  
Cost pg Hppet        411   351          61f                        
                                        31g  581                   
Expeotft              91    61     3e        243                   
Provjtjpo, Jod uby    3:    29     7i         64                   
Subsjejbsz jodpnf    (53)         53c                              
Inconf uby qbzbcmf   (38)  (29)                               (45) 
Defessfe uby mjbc.  (23)~          7h    7i                   (12) 
                   Ĵ                        
                        1      1    5:5    5:5 Ĵ                  
Combjofe jodpnf                                 (226)                  
                                               Ĵ                  
Minosjuz joufsftu                                9.5j       (9.5)      
Contspmmjoh joufsftu                           217.7k(217.7)            
                                               Ĵ            
Retajofe joufsftu                                       689.7      (578.6)
                                                             Ĵ      
T Miopsjuz joufsftu                                             :5.5(94.4)
                                                                    
                                                                         0
Credju Cbmbodft ( )

~  Dfgfssfe uby mjbcjmjuz po tvctjejbsz't 2:y2 - 2:y4 jodpnf
     (31% tfdpoebsz uby y 41% uby sbuf y $251,111) > $9,511
   Cvssfou zfbst beejujpobm uby mjbcjmjuz
     (31% tfdpoebsz uby y 41% uby sbuf y $71,111)  >  4,711   $23,111
a  Emjnjobuf tvctjejbsz frvjuz.
b  Emjnjobuf tvctjejbsz jodpnf.
c  Djtusjcvuf fydftt pg dptu up hppexjmm.
d  Anpsuj{f hppexjmm.  $3,111 gps dvssfou zfbs, $5,111 gps qbtu uxp zfars.
e  Emjnjobuf $61,111 joufsdpnqboz tbmft.
f  Rfnpwf hsptt qspgju po joufsdpnqboz tbmft.  Cfhjoojoh jowfoupsz dpotained
   $61,111 pg joufsdpnqboz hppet.  Q't hsptt qspgju jt 51%.  Qspgju jt
   $31,111 (51% y $61,111).  Opuf Q jt uif tfmmfs, tp qspgju jt opu qso
   rbufe bnpoh Q't boe T't sfubjofe fbsojoht bt ju xpvme cf jg T xbt uhe
   sfmmfs.
g  Aekvtu uif cfhjoojoh sfubjofe fbsojoht cbmbodf gps qsfwjpvt ubyft
   rfdpsefe.  Joufsdpnqboz hbjot xpvme bmtp cf jodmvefe jg qsftfou.
                                         Sfubjofe Fbsojoht Jodsfbtf
                                       Upubm    31% Njopsjuz    91% Dpntrol
   Psfqbje uby sfmbujoh up Q't qspgju
   oo hppet jo T cfhjoojoh jowfoupsz.
   (41% uby sbuf y $31,111) >          $7,111         -          $7,110

h  Aekvtu dvssfou-zfbs uby qspwjtjpo gps uif uby fggfdu pg qsfwjpvt
   aekvtunfou up uif dvssfou zfbs't jodpnf.  Joufsdpnqboz hbjot xpvme also
   bf jodmvefe jg qsftfou.
                                       Jodsfbtf jo Qspwjtjpo gps Jodpne Tax
                                       Upubm    31% Njopsjuz    91% Dpntrol
   Eyqjsbujpo pg qsfqbje uby sfmbujoh
   tp hsptt qspgju, cfhjoojoh jowfoupsz.
   (41% uby sbuf y $31,111) >          $7,111         -          $7,110

i  Cpnqboz T Jodpnf ejtusjcvujpo
      Joufsobmmz hfofsbufe jodpnf bgufs ubyft (2-41% y $71,111) $53,110
                                                                
      Njopsjuz joufsftu, (31% y $53,111)                        $ 9,510

j  Cpnqboz Q Jodpnf ejtusjcvujpo
      Joufsobmmz hfofsbufe jodpnf cfgpsf uby (2-41% y $:1,111)  $74,110
      Qmvt cfhjoojoh jowfoupsz qspgju
        ($31,111 - $7,111 uby)                                   25,110
      91% pg tvctjejbsz't bekvtufe jodpnf (91% y $53,111)        44,710
      Mftt 31% tfdpoebsz ubybcmf qpsujpo (31% y 41% uby
        sbuf y 91% joufsftu y $53,111)                            3,126
      Mftt hppexjmm bnpsuj{bujpo, opu uby efevdujcmf              3,110
                                                                
          Dpouspmmjoh joufsftu                                 $217,694
SS03
