Question

Mark is refinishing an antique china cabinet and has already spent $180 on the restoration. He expects to be able to sell the cabinet for $360. Mark discovers that he needs to do an additional $200 of work to make the cabinet worth $360 to potential buyers. He could also sell the cabinet now, without completing the additional work, for $100. What should he do?

Answer 1

Answer:

He should complete the additional work and sell the cabinet for $360.

Explanation:

This is because if he is to sell for $100 without completing the additional work, he will be making a loss of $80, having spent $180.

But on completion of the additional work, he would have spent a total of $380, therefore, if he sells the cabinet for $360, he will only be making a loss of $20.

Therefore, the better option is to complete the additional work and sell for $360.