Sarah buys and sells real estate.Two weeks ago,she paid $140,000 for a house on Oak Street,intending to spend $20,000 on repairs sell the house for $175,000.Last week,the city government announced a plan to build a "halfway house" for convicted criminals on Oak Street.As a result of the city's announced plan,Sarah is weighing two alternatives: She can go ahead with the $20,000 in repairs and then sell the house for $135,000,or she can forgo the repairs and sell the house as it is for $120,000.Sarah should

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Sarah's original plan was to spend $20,000 on repairs and sell the house for $175,000. However, with the city government's plan to build a halfway house for convicted criminals on Oak Street, the value of the property has decreased significantly. If Sarah goes ahead with the repairs, she will only be able to sell the house for $135,000, which means she would have lost money on the investment. Selling the house as it is for $120,000 would allow her to recoup some of her initial investment, but she would still take a loss. Therefore, the best choice for Sarah is to forgo the repairs and sell the house as is for $120,000.

Sarah Buys and Sells Real Estate