Buy a $10,000 truck and your Bank drops by $10,000, while your leaderboard number doesn't move at all. Both are telling the truth. This week you find out how.
Learning objectives. After this week you can (1) separate cash from other assets; (2) compute book value and net worth; and (3) compute runway and price the dealer buy-back.
Remember this: net worth is what you own. Cash is what you can spend tonight.
1) Cash vs. assets
Cash is liquid: it pays tonight's wages. A truck is a productive asset, but you can't pay wages with a bumper. Buying a truck turns $10,000 of cash into $10,000 of asset: your wealth is unchanged, but its form is not.
2) Book value, depreciation and net worth
Assets depreciate: they lose value as they age and are used. A truck's book value falls $100 a day and never goes below $5,000. The decision form prints it for any truck you could sell, and the leaderboard shows your total.
Book Value = $10,000 − $100 × Days Owned (never below $5,000)
Net Worth = Cash + Book Value of Every Truck
| Days owned | Book value | Dealer pays (60%) |
|---|---|---|
| 0 | $10,000 | $6,000 |
| 10 | $9,000 | $5,400 |
| 25 | $7,500 | $4,500 |
| 50 or more | $5,000 | $3,000 |
Cash $18,400, a founding truck at $5,000 and a second truck owned 17 days ($8,300): net worth is 18,400 + 5,000 + 8,300 = $31,700. That is the number the leaderboard ranks.
3) The dealer buy-back
Any truck except your founding truck can be sold back to the dealer. A working truck fetches 60% of book; the 40% gap is the liquidation haircut, the price of instant cash. A broken truck fetches only scrap rates. Bought on day 12 and sold on day 42, a truck is 30 days old: book $7,000, and the dealer pays 0.60 × 7,000 = $4,200.
4) Runway
Runway (days) = Cash ÷ Average Daily Loss
$8,000 of cash while losing $250 a day is 8,000 ÷ 250 = 32 days to fix the business. A profitable team has no runway problem; a losing one has a clock.
Quick self-check
(a) A truck owned 25 days: book value and dealer price? (b) Cash $20,000 plus one truck at $6,000 book: net worth? (c) Cash $9,000, losing $600 a day: runway? (Answers: $7,500 and $4,500; $26,000; 15 days.)
Common mistakes
- Confusing book with resale. Book is what the leaderboard counts; 60% is what you get.
- Judging expansion by the cash pile. Having $10,000 is not a reason to spend it.
- Waiting for a breakdown to sell. A broken truck sells for scrap.
This week in the arena
Build your team's balance sheet: cash from the Bank line, each truck's book value from the decision form, and net worth. Check it against the leaderboard. If your Net today has been negative, compute your runway too.