George has spent $600 purchasing and repairing an old fishing boat,which he expects to sell for $900 once the repairs are complete.George discovers that,in addition to the $600 he has already spent,he needs to make an additional repair,which will cost another $400,in order to make the boat worth $900 to potential buyers.He can sell the boat as it is now for $400.What should he do?

Question

Quizplus · Accepted Answer

If George completes the additional repair for $400 and sells the boat for $900, he will have a total profit of $900 - ($600 + $400) = $-100. This means he will not make a profit and will actually lose $100. However, if he sells the boat as it is now for $400, he will have a total profit of $400 - $600 = $-200. This means he will lose more money if he sells the boat without completing the additional repair. Therefore, the best choice is for George to complete the repairs and sell the boat for $900, even though he will not make a profit.

George Has Spent $600 Purchasing and Repairing an Old Fishing