Multi-Source Reasoning - Multiple Choice

Carl is interested in buying a 1969 Vanar and is negotiating the price with the current owner. The asking price for the car is $64,000, and Carl expects that he will be able to buy the car for the average of the asking price and his initial offer. With significant body work, painting, and reupholstery, the car will be in Very Good condition. If Carl wants to make a profit of $4,000 after repairing and selling the car, what is the highest initial offer he can make?

Incorrect. [[snippet]] While Carl could offer this amount, it is not the largest possible offer he can make. If he makes an offer that is too low, he risks insulting the seller.

That's right! First, you need to determine at what price Carl can purchase the car and still plan to make a profit of $4,000. To do this, you should subtract his profit and the cost of the repairs from the expected price Carl can sell a 1969 Vanar that is in Very Good condition. From the price guide, the expected price Carl can sell the car for is $73,000. The total cost of repairs is >$$\$5{,}500+ \$1{,}500 + \$5{,}500 = \$12{,}500$$. That means that Carl would need to purchase the car for >$$\$73{,}000- \$12{,}500 - \$4{,}000 = \$56{,}500$$. Finally, Carl expects that he will be able to buy the car for the average of the asking price and his initial offer. So you can solve for what his largest possible offer could be. >$$\displaystyle\$56{,}500 = \frac{\$64{,}000+\mbox{offer}}{2}$$ >$$\$113{,}000 = \$64{,}000+\mbox{offer}$$ >$$\$49{,}000 = \mbox{offer}$$

Incorrect. [[snippet]] This is the highest price Carl could offer if the car did not need painting. Be sure to factor in all of the necessary repairs in your calculation.

Incorrect. [[snippet]] This is the highest price Carl could offer if he was able to buy the car for the amount he offers. Take into account that Carl expects that he will be able to buy the car for the average of the asking price and his initial offer.

Incorrect. [[snippet]] This is the highest price Carl could offer if the car did not need reupholstery (or, instead, didn't need significant body work). Be sure to factor in all of the necessary repairs in your calculation.

$45,500

$49,000

$52,000

$56,500

$60,000