Yvette 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 yvette purchased. as a result of the city’s announced plan, yvette is weighing two alternatives: she can go ahead with the $50,000 in repairs and then sell the house for $290,000, or she can forgo the repairs and sell the house as it is for $250,000. she shoulda. keep the house and live in it.
b. go ahead with the $50,000 in repairs and sell the house for $290,000.
c. forgo the repairs and sell the house as it is for $250,000.
d. move the house from pine street to a more desirable location, regardless of the cost of doing so.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?