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Rick buys a 1966 Mustang for $3,000, planning to restore and sell the car

Economics

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Rick buys a 1966 Mustang for $3,000, planning to restore and sell the car. He goes on to spend $9,000 restoring the car. At this point, he can sell the car for $10,000. As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine, the car would sell for $13,000. Rick should:

a) Complete the repairs and sell the car for $13,000,

b) Sell the car now for $10,000,

c) Never try such an expensive project again,

d) Be indifferent between: selling the car now and replacing the engine and then selling it.