Mike Has Spent $800 Purchasing and Repairing an Old Motorcycle

Mike has spent $800 purchasing and repairing an old motorcycle, which he expects to sell for $1200 once the repairs are complete. He discovers that he needs an additional repair, which will cost $200, in order to complete the repairs. He can sell the motorcycle as it is now for $400. What should he do?

A) He should cut his losses and take the $400.
B) He should never sell something for less than it cost.
C) He should complete the repairs and sell the motorcycle.
D) It doesn't matter which action he takes; the outcome is the same either way.