Savion is restoring a car and has already spent $4, 000 on the restoration. He expects to be able to sell the car for S 5800. Savion discovers that he needs to do an additional $2, 400 of work to make the car worth $5, 800 to potential buyers. He could also sell the car now, without completing the additional work, for $3, 800. What should he do? a. He should complete the additional work and sell the car for $5, 800. b. He should keep the car since it wouldn't be rational to spend $6, 400 restoring a car and then sell it for only $5,800. c. He should sell the car now for $3,800. d. It does. not matter which action he takes since the outcome will be the same either way.

Savion is restoring a car and has already spent $4, 000 on the restoration. He expects to be able to sell the car for S 5800. Savion discovers that he needs to do an additional $2, 400 of work to make the car worth $5, 800 to potential buyers. He could also sell the car now, without completing the additional work, for $3, 800. What should he do? a. He should complete the additional work and sell the car for $5, 800. b. He should keep the car since it wouldn't be rational to spend $6, 400 restoring a car and then sell it for only $5,800. c. He should sell the car now for $3,800. d. It does. not matter which action he takes since the outcome will be the same either way.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 8SQP

See similar textbooks

Similar questions

Cassie's Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt "as is" now for $900. What should she do? She should cut her losses and sell the quilt now. It does not matter what she does; she is going to take a loss on her project. She should purchase the period fabric, complete the task and then sell the quilt. She should not do anymore work on the quilt because she has already spent too much time on it and has not been paid for that time
c) What is the monthly profit or loss if the company stays with Clunker and sells 90,000 bags per month? The monthly profit or loss if the company stays with Clunker and sells 90,000 bags per month is $enter your response here. (Round your response to the nearest dollar and include a minus sign if necessary.)
You purchased a piece of property at $450,000 six years ago. You can sell theproperty at $650,000. What is the rate of return on this real estate investment?
I'm not sure if I just do 25,000-18,000 to get $7,000 as the value added or if I also have to consider the steel mill and do 18,000-10,000 to get 8,000 and then add that to the 7,000 and get $15,000.
Why are the economic engineers required to consider whether a company should buy equipment to perform an operation now or should be done manually?
Sandra lives in Melbourne and runs a business that sells guitars. In an average year, she receives $2.6 millionfrom sales of guitars. Of this sales revenue, she must pay the manufacturer a wholesale cost of $1,400,000. She also pays wages and utility bills totalling $1,100,000. If she does not operate this guitar business, she can work in an accounting firm and receive an annual salary of $70,000. She owns her showroom. If she chooses to rent it out, she will receive $50,000 in rent per year. Assume that the value of this showroom does not depreciate during the year. No other costs are incurred in running this guitar business. What is Sandra’s accounting profit (used for tax purposes)? What is her economic profit?
Sunflower Manufacturing recently applied for a $10 million loan at The Democrat Federal Bank (known simplyas The Democrat). The purpose of the loan is to support its working capital needs (short-term funds) duringthe next nine months. Sunflower has been a loyal customer of the bank for many years and has beenextended whatever amount of credit it requested in the past.Sheli Crocker, who is a new, young loan officer at The Democrat, reviewed Sunflower's loan application anddecided to turn down the loan for the requested amount. In her report to Henry, her boss and the senior loanofficer, Sheli indicated that she thought Sunflower would have trouble repaying a $10 million loan because itsfinancial positions has deteriorated in recent months. Sheli noted that the company's ability to pay its currentobligation - that is, its liquidity position - is poor and that analysts are pessimistic about Sunflower's ability toimprove its liquidity during the next two years. As a result, Sheli…
True/False When TR is maximum then MR is also at the maximum level
Courtney Kamauf schedules production of a popular Rustic Coffee Table at Kamauf Enterprises, Inc. The table requires a top, four legs, 1/8 gallon of stain, 1/16 gallon of glue, 2 short braces between the legs and 2 long braces between the legs, and a brass cap that goes on the bottom of each leg. She has 100 gallons of glue in inventory, but none of the other components. All items except the brass caps, stain, and glue are ordered on a lot-for-lot basis. The caps are purchased in quantities of 1,000, stain and glue by the gallon. Lead time is 1 day for each item. Schedule the order releases necessary to produce 640 coffee tables on days 5 and 6, and 128 on days 7 and 8.
Dexter set up a computer repair business out of his home office. Based on the square footage of his office, he allocates a fixed cost of $400 per month in mortgage expenses. He also has a monthly internet bill of $45 and a monthly phone bill of $35. While repairs vary greatly, Dexter estimates an average of $19 in expenses per repair and charges a flat $49 fee per repair for his labor. 3a. How many computers does Dexter need to repair each month to break even?__________3b. What is Dexter’s profit / loss if he only repairs 8 computers in a month?__________3c. What fee would Dexter need to charge to break even at 8 repairs?
Suppose that you and a friend have started a pizza delivery business. First you had to find a shop front to make the pizzas and this costs $20,000 per year plus set up costs of $45,000 for the oven and kitchen set up. You estimate that the daily costs of labour will be $300; the ingredient cost of making a pizza is around $2.50 each and delivery is around $2 per pizza. Calculate the fixed costs of this business. If you use your combined savings to pay these costs what is the estimated implicit cost of starting the business in the first year if the interest rate is 4% per year. The government locks down the economy to prevent the spread of a deadly infectious virus, but still allows food delivery (assume that your business is one of many in a competitive market). Explain the impact of that policy on the supply, demand, equilibrium on market of pizza
i need urgent i will 5 upvotes