Homework answers / question archive / Stan Moneymaker presently owns a 10-year-old automobile with low mileage (78,000 miles)

Stan Moneymaker presently owns a 10-year-old automobile with low mileage (78,000 miles)

Civil Engineering

Share With

Stan Moneymaker presently owns a 10-year-old automobile with low mileage (78,000 miles). The NADA “blue book” value of the car is $2,500. Unfortunately, the car ’s transmission just failed, and Stan decided to spend $1,500 to have it repaired. Now, six months later, Stan has decided to sell the car, and he reasons that his asking price should be $2,500 + $1,500 = $4,000. Comment on the wisdom of Stan’s logic. If he receives an offer for $3,000, should he accept it? Explain your reasoning. (2.1)