This profit puzzle follows two separate buy-and-sell transactions. First, a man buys an item for $10 and sells it for $20. That gives him a $10 profit. Then he buys the same item back for $30 and later sells it for $40. That gives him another $10 profit. Add the two profits together and the total profit is $20. Another way to check is to combine all the cash flows: -$10 + $20 – $30 + $40 = $20. So the final answer is $20 profit. People sometimes get confused because the item is bought back at a higher price, but each transaction still produces a $10 gain. Looking at the full sequence makes the result clear.
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