Lisa buys a 1982 BMW, which she plans to restore and sell. She anticipates that the cost of the car and the repairs will be $14,000 and that she can sell it for $20,000. When she has spent $11,000, she discovers she needs to replace the engine, which will cost $5,000. She can sell the car without the new engine for $14,000. What should Lisa do?

Question

Quizplus · Accepted Answer

Completing the repairs will cost an additional $5,000, totaling $16,000 spent, but she can sell it for $20,000, resulting in a $4,000 profit. Selling now for $14,000 would result in a $3,000 loss.

Lisa Buys a 1982 BMW, Which She Plans to Restore