Project #6847 - Finance: Dividing Family Assets

Suppose an aunt has passed away and bequeathed to you and your siblings (one brother, one sister) a variety of assets. The original cost of these assets follows:

Item Cost When Purchased
Jewelry $500 by Grandmother 75 years ago
House $1,200,000 10 years ago
Stocks and Bonds $1,000,000 3 years ago
Vintage (used) Car $200,000 2 months ago
Furniture $15,000 various dates during last 40 years

 

Because you are taking a course in finance, your siblings put you in charge of dividing the assets fairly among the three of you. Before you start, your brother approaches you and says: “I’d really like the car for myself, so when you divide up the assets, just give me the car and deduct the $200,000 from my share.”
Hearing that, your sister says: “That sounds fair, because I really like the jewelry and you can assign that to me and deduct the $500 from my share.”
You have always loved your aunt’s house and its furnishings, so you would like to keep the house and the furniture.
a. How do you respond to your brother and sister’s requests? Justify your responses.
b. How would you go about determining appropriate values for each asset?

Subject Business
Due By (Pacific Time) 05/28/2013 12:00 am
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