Question

Cole 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. Cole discovers that he needs to do an additional $200 worth 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 Cole do?Select one:a. He should sell the cabinet now for $100.b. He should keep the cabinet since it wouldn't be rational to spend $380 restoring a cabinet and then sell it for only $360.c. He should complete the additional work and sell the cabinet for $360.d. It does not matter which action he takes since the outcome will be the same either way.

Answer 1

The answer is: C) He should complete the additional work and sell the cabinet for $360.

Step-by-step explanation:

Cole has already spent $180 in the cabinet and its restoration.

If he sells it now as it is for $100, he will lose $80.

If he finishes restoring the cabinet by investing $200 more, and sells it for $360, he will lose $20.

The best option Cole can take is finishing the cabinet and selling it for $360, so that way he will only lose $20.