Jenny's parents gave her a used car on the day she started her college career. Jenny paid $834 in repair costs over the past two years. Today, she would like to purchase another car she believes will be more reliable in the future. When deciding what price to ask for her car, how should Jenny consider the $834?

Question

Quizplus · Accepted Answer

The $834 spent on repairs is a sunk cost because it is a past expense that cannot be recovered and should not influence the decision on the price to ask for the car.

Jenny's Parents Gave Her a Used Car on the Day