Brain Teasers
Bridge Builders
There was a new and very popular Emperor in a small country in the Pacific Ocean. The country consisted of two small islands 3 miles apart. The only way to get to the other island was an old, small ferry boat. The new Emperor was very progressive and wanted to shape up the community to attract tourists and hopefully new residents to stop the population from shrinking.
He decided to connect the islands by a new bridge. Everyone knew the job would be difficult and dangerous, and when he put out the word only two companies were even willing to attempt it.
Company A was the first to offer and said they could do it for $800,000. When the Emperor told the contractor of Company B what Company A offered, the contractor of Company B said they could not do it for less than $1,000,000. The Emperor took a while to think it over. Contractor B, being very smart and confident, came back to the Emperor and said, "Sir, I will give you an offer you cannot refuse. The decision is completely up to you in the end, but you can pay me $200,000, $750,000, or $1,000,000 for the job." Contractor B proceeded with his details and the Emperor immediately accepted his offer. Company B ended up being paid $1,000,000 for the job. Contractor B did not lie, cheat, or swindle the Emperor in any way. He is a very honest businessman.
Why did Company B's offer sound so good to the Emperor, and more importantly, how did Company B end up with the highest amount?
He decided to connect the islands by a new bridge. Everyone knew the job would be difficult and dangerous, and when he put out the word only two companies were even willing to attempt it.
Company A was the first to offer and said they could do it for $800,000. When the Emperor told the contractor of Company B what Company A offered, the contractor of Company B said they could not do it for less than $1,000,000. The Emperor took a while to think it over. Contractor B, being very smart and confident, came back to the Emperor and said, "Sir, I will give you an offer you cannot refuse. The decision is completely up to you in the end, but you can pay me $200,000, $750,000, or $1,000,000 for the job." Contractor B proceeded with his details and the Emperor immediately accepted his offer. Company B ended up being paid $1,000,000 for the job. Contractor B did not lie, cheat, or swindle the Emperor in any way. He is a very honest businessman.
Why did Company B's offer sound so good to the Emperor, and more importantly, how did Company B end up with the highest amount?
Hint
2 Hints:1. Company A is part of Company B's idea.
2. Use your math and accounting skills
Answer
Contractor B was very confident in his company's excellent work. It was high quality work so could not lower the full price to under $1,000,000. He suggested to the Emperor that each company start building from opposite ends and each complete a quarter of the bridge. The emperor could then examine the 2 quarters and make his decision on which company would complete the job, based off of quality.Each company would be paid $200,000 for their quarter, that way if Company A won, the emperor would still only be paying $800,000 ($400,000 more to Company A for the rest of the bridge). If Company B won, Contractor B argued, it would be because they were obviously superior in bridge building and thus worthy of the extra money. The Emperor would still only be paying $950,000 that way anyway, which is still cheaper than Company B's full offer, while Company B would still get paid their full ¾ pay for ¾ of a bridge ($750,000).
When Company A heard this offer, they knew they were beat because they knew their bridge-building skills were far inferior. They figured it was not worth the $200,000 to start even building since it was so dangerous and immediately backed out, forcing the Emperor to pay Company B their full asking price of $1,000,000.
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