Rick buys a 1966 Mustang for $3,000, planning to restore and sell the car. He goes on to spend $9,000 restoring the car. At this point he can sell the car for $10,000. As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine the car would sell for $13,000. Rick should
complete the repairs and sell the car for $13,000.
sell the car now for $10,000.
never try such an expensive project again.
be indifferent between (i) selling the car now and (ii) replacing the engine and then selling it.