He should sell the cabinet now for $100. He should keep the cabinet since it wou

Question

       He should sell the cabinet now for $100.
       He should keep the cabinet since it wouldn%u2019t be rational to spend $380 restoring a cabinet and then sell it for only $360.
       He should complete the additional work and sell the cabinet for $360.
       It does not matter which action he takes since the outcome will be the same either way.

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?

Explanation / Answer

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

as his loss = $380-$360 = $20 < $180 - $100 = $80

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