You have spent $1000 building a hot-dog stand based on estimates of sales of $2000. the hot-dog stand is nearly completed, but now you estimate total sales o be only $800. you can complete the hot-dog stand for another $300. Should you complete the hot-dog stand? (Assume that the hot dogs are costless to you.)

a. yes

b. no

c. there is not enough information

Question

Guest

Business

24 April, 04:50

You have spent $1000 building a hot-dog stand based on estimates of sales of $2000. the hot-dog stand is nearly completed, but now you estimate total sales o be only $800. you can complete the hot-dog stand for another $300. Should you complete the hot-dog stand? (Assume that the hot dogs are costless to you.)

a. yes

b. no

c. there is not enough information

+5

Answers (1)

Know the Answer?

Thalia · Answer 1

correct answer is a. yes

Explanation:

given data

spent = $1000

estimates of sales = $2000

total sales = $800

hot-dog stand for another = $300

solution

we already spent here $1000 and assuming it is not recover

so If you do nothing it will be sunk cost in future

and

when we spend $300 another and earn $800

so we make here = $1000 + $300 - $800 = $500

so we can lose $500

so here lose $500 is better than lose $1000

so correct answer is a. yes