Monica has spent $120,000 purchasing and repairing an old cabin,which she expects to sell for $130,000.She discovers that she needs an additional repair,which will cost $20,000.She can sell the cabin as it is now for $115,000.What should she do

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Quizplus · Accepted Answer

If Monica sells the cabin now for $115,000, she will lose $5,000 ($120,000 - $115,000). If she spends an additional $20,000 on repairs, her total cost will be $140,000, and she will lose $10,000 ($140,000 - $130,000). Therefore, selling now minimizes her loss.

Monica Has Spent $120,000 Purchasing and Repairing an Old Cabin,which