You are selling a product on commission, at the rate of $1,000 per sale. To date, you have spent $800 promoting a particular prospective sale. You are confident you can complete this sale with an added expenditure of some undetermined amount. What is the maximum amount, over and above what you have already spent, that you should be willing to spend to assure the sale

Question

Alonzo Delacruz

Business

16 April, 09:47

You are selling a product on commission, at the rate of $1,000 per sale. To date, you have spent $800 promoting a particular prospective sale. You are confident you can complete this sale with an added expenditure of some undetermined amount. What is the maximum amount, over and above what you have already spent, that you should be willing to spend to assure the sale

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Janiyah Serrano · Answer 1

Either you quit trying and lose $800 sunk, or you spend $800 for $1,600 total in which the Net from the sale of $1,000 would results in a loss of $600. That means it will be of good to lose $600 than $800.

Explanation:

Since $800 has been spent which means Spending up to an additional $1,000 is still reasonable, but a condition in which you know that the deal will definitely go through.

Secondly since you have already sunk $800, and you know that spending an additional $800 would guarantee it, you can do one among this two options which are either you stop trying and lose the $800 sunk, or you the spend $800 for $1,600 ($1,000+$600) total in which the Net from the sale of $1,000 would results in a loss of $600 ($1,000-$800=200,$800-$200=$600). That means it will be of good to lose $600 than $800.