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Let's continue working on colors.  The third house can be either green, red or white (yellow and blue are already assigned to the first and the second house).

The third house can't be green, since:
5. The  green  house owner drinks  coffee.
and we know already that the owner of the third house drinks milk, not coffee.

The third house can't be white either, since:
4. The  green  house is on the  left  of the  white  house (next to it).
and we know already that the blue is left of the third house, not the green one.

Hence, the only color, which is left for the third house, is red.
Once the color of the third house is defined, the nationality of its owner becomes obvious:
1. The  Brit  lives in a  red  house.

The remaining two colors are easy to assign:
4. The  green  house is on the  left  of the  white  house (next to it).
Only two adjacent houses and two colors are left and thus, the fourth house is green and the second house is white.

Once the color of the fourth house is determined, the beverage choice of its owner becomes obvious:
5. The  green  house owner drinks  coffee.

 No  1 2 3 4 5
Col yellow blue red green white
Nat Norw   Brit    
Bev     milk coffee  
Cig Dunh        
Pet   horse      

As a possible next step can you figure out what are the nationalities of the second, fourth and fifth house owners?


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