Question

Javier purchased a 1972 Dodge Charger in 2011 for $17,000 and a year later he sold it for $21,000. Due to these transactions..."

a. He experienced a loss.
b. He experienced a gain.
c. There was no change in his wealth.
d. He experienced depreciation.

Answer 1

Javier experienced a gain because the selling price was higher than the purchase price.

Step-by-step explanation:

Javier purchased a 1972 Dodge Charger in 2011 for $17,000 and sold it a year later for $21,000. In this case, Javier experienced a gain because the selling price was higher than the purchase price. The difference between the selling price and the purchase price is known as the capital gain. In this situation, the capital gain is $21,000 - $17,000 = $4,000.