An elderly relative offers to sell you their used 1 959 Jaguar Mark 9 saloon for $50 000. You note that very similar cars are selling on the open market for $90 000. You don't care for classic cars and would rather buy a new Subaru Outback available to you for $35 000. What is the net value of buying the Jaguar?
A)$50 000, since the Jaguar could be bought for this price.
B)$40 000, since this is the difference between purchase and resale price of the Jaguar.
C)$90 000, since the Jaguar could be sold for this price.
D)$35 000, since this is the value of the car that you really want to buy.

Question

Quizplus · Accepted Answer

The net value of buying the Jaguar is the difference between the purchase price and the resale price, which is $40,000 ($90,000 - $50,000). Since the person does not care for classic cars and would rather buy a new Outback, the best choice would be to not buy the Jaguar and purchase the desired car instead.

An Elderly Relative Offers to Sell You Their Used 1