Q1: You are selling your car this week. (2 marks) At the last minute, the transm

Question

Q1: You are selling your car this week. (2 marks) At the last minute, the transmission dies. You can pay AED500 to have it repaired, or sell the car "as is." In each of the following scenarios, should you have the transmission repaired? Explain. 1(a). If you could sell for AED6000 if transmission works, AED5500 if it doesn't (1 mark) 1(b). If you could sell for AED6500 if transmission works, AED5700 if it doesn't (1 mark) Note: You have already spent AED1000 on repairs and maintenance last month

Explanation / Answer

Answer 1(a):- Profit if transmission is repaired= 6000-1000-500= AED4500

Profit if transmission is not repaired =5500-1000=AED4500

As profit is same in both the case, so any decision can be taken.

Answer 1(b):- Profit if transmission is repaired= 6500-1000-500= AED5000

Profit if transmission is not repaired =5700-1000=AED4700

So transmission should be replaced.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.