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(Case) Angel Mercury a construction Company has begun development of a new housing sub-division. The lots and initial construction materials have been purchased, and framing
(Case) Angel Mercury a construction Company has begun development of a new housing sub-division. The lots and initial construction materials have been purchased, and framing has begun. A total of $4 million has been invested. Suddenly, Demonetization announced impacted banking industry causes a recession in real estate, and subsequently the bottom falls out of the housing market. The sub-division land is now worth much less than the construction company paid for it. If the company abandons the project, it will take a $4 million loss. Some company executives want to finish the houses and sell them to recover at least a portion of the costs already spent - sunk costs. But it will cost an additional $6 million to complete the project. The company will generate 8 million What would be your decision
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