The sunk cost amounts to $70. Sunk Cost describes an expense that has already been incurred and is non-recoverable. Typically, these costs are ignored in decision-making as they cannot be avoided regardless of the decisions made. In this scenario, Damon Rutton spent $70 on a ticket, which is the only pre-paid expense; any additional costs for parking or refreshments would only be incurred if he chooses to attend the game.
Response: $75,000
Clarification:
According to real estate principles, the 1% rule suggests evaluating property prices. It asserts that the rent should be at least 1% of the property's purchase price on a monthly basis.
The greater the rental percentage over 1%, the better the deal.
In this scenario, the most suitable option would be $75,000 since;
1,000 divided by 75,000 multiplied by 100 results in
1.33%.
The $1,000 falls above 1% of $75,000, making it a very good investment.
