Tom Is Restoring a Car and Has Already Spent $3500

question 1

Multiple Choice

Tom is restoring a car and has already spent $3500 on the restoration.He expects to be able to sell the car for $5000.Tom discovers that he needs to do an additional $2000 of work to make the table worth $5000 to potential buyers.He could also sell the car now,without completing the additional work,for $2800.What should he do?

• A) He should sell the car now for $2800.
• B) He should keep the car since it wouldn't be rational to spend $5500 restoring a car and then sell it for only $5000.
• C) He should complete the additional work and sell the car for $5000.
• D) It does not matter which action he takes since the outcome will be the same either way.

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