Jay has spent $2400 purchasing and repairing an old tractor, which he expects to sell for $4000. He discovers that he needs an additional repair, which will cost $600. He can sell the tractor as it is now for $1200. What should he do?

Question

Quizplus · Accepted Answer

If Jay completes the additional repair, he will have spent a total of $3000 ($2400 + $600), but he will then be able to sell the tractor for $4000, resulting in a profit of $1000. If he sells the tractor as it is now for $1200, he will only make a profit of $200 ($1200 - $1000 spent on repairs). Therefore, completing the repairs and selling the tractor is the best option.

Jay Has Spent $2400 Purchasing and Repairing an Old Tractor