Lexi buys and sells real estate. Two weeks ago, she paid $30…
Lexi buys and sells real estate. Two weeks ago, she paid $300,000 for a house on Pine Street, intending to spend $50,000 on repairs and then sell the house for $400,000. Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Lexi purchased. As a result of the city’s announced plan, she is weighing two alternatives: go ahead with the $50,000 in repairs and then sell the house for $290,000, or forgo the repairs and sell the house as is for $250,000. Lexi should