Business, 13.09.2019 00:30 janae201831
Aprofit-maximizing decision must be made about whether to keep a bed & breakfast operating. until the place sells, the mortgage of $3000/month must be paid, since it is a sunk cost. if the restaurant operates, costs rise by $4000 per month, but revenue will be only $6000 per month. until the building can be sold,
it is best to ignore sunk costs and keep the bed & breakfast operating.
it is best to keep the bed & breakfast operating because it is profitable.
it is best to shut down the bed & breakfast since it is taking a loss.
Answers: 2
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