Question 6
2 Points
Olivia buys and sells real estate. Two weeks ago, she paid $350,000 for a
house on Elderberry Avenue, intending to spend $70,000 on repairs and
then sell the house for $480,000. Last week, the city government
anounced a plan to build a new landfill on Elderberry Avenue just down
the street from the house Olivia purchased. As a result of the city's
anounced plan, Olivia is weighing two alternatives: She can go ahead with
the $70,000 in repairs and then sell the house for $340,000, or she can
forgo the repairs and sell the house as it is for $290,000. She should
(A) forgo the repairs and sell the house as it is for $290,000.
B
go ahead with the $70,000 in repairs and sell the house for $340,000.
C) keep the house and live in it.
D
move the house from Elderberry Street to a more desirable location,
regardless of the cost of doing so.