Yvette buys and sells real estate.Two weeks ago,she paid $300,000 for a house on Pine Street,intending to spend $50,000 on repairs and then sell the house for $400,000.Last week,the city government announced a plan to build a new landfill on Pine Street just down the street from the house Yvette purchased.As a result of the city's announced plan,Yvette is weighing two alternatives: She can go ahead with the $50,000 in repairs and then sell the house for $290,000,or she can forgo the repairs and sell the house as it is for $250,000.She should

Question

Quizplus · Accepted Answer

Yvette should forgo the repairs and sell the house as it is for $250,000. This is because the announcement of the new landfill has significantly decreased the value of the property, and it is unlikely that she would be able to sell it for the original target price of $400,000 even after the repairs. By selling the house as it is, she can recoup some of her initial investment and potentially avoid investing even more money into repairs that may not increase the house's value.

Yvette Buys and Sells Real Estate