Bill is restoring a car and has already spent $4000 on the restoration.He expects to be able to sell the car for $5800.Bill discovers that he needs to do an additional $2400 of work to make the car worth $5800 to potential buyers.He could also sell the car now,without completing the additional work,for $3800.What should he do?
A) He should sell the car now for $3800.
B) He should keep the car since it wouldn't be rational to spend $6400 restoring a car and then sell it for only $5800.
C) He should complete the additional work and sell the car for $5800.
D) It does not matter which action he takes since the outcome will be the same either way.

Question

Quizplus · Accepted Answer

Selling the car now for $3800 minimizes his loss, as completing the additional work would result in a total cost of $6400, exceeding the car's selling price of $5800.

Bill Is Restoring a Car and Has Already Spent $4000