Use the Information Below to Answer the Following Question(s)

question 37

Multiple Choice

Use the information below to answer the following question(s) :
The owner of the Krusty Krab is considering selling his restaurant and retiring.An investor has offered to buy the Krusty Krab for $350,000 whenever the owner is ready for retirement.The owner is considering the following three alternatives:
1.Sell the restaurant now and retire.
2.Hire someone to manage the restaurant for the next year and retire.This will require the owner to spend $50,000 now,but will generate $100,000 in profit next year.In one year the owner will sell the restaurant for $350,000.
3.Scale back the restaurant's hours and ease into retirement over the next year.This will require the owner to spend $40,000 on expenses now,but will generate $75,000 in profit at the end of the year.In one year the owner will sell the restaurant for $350,000.
-If the interest rate is 7%,the NPV of alternative #2 is closest to:

• A)$350,000.
• B)$357,196.
• C)$370,561.
• D)$401,121.

---

Definitions:

Legal Memorandum

A document written by an attorney or paralegal presenting research, analysis, and legal arguments related to a specific legal issue or case.

Internal Legal

Pertaining to or within the legal processes, decisions, or documents of an organization or institution.

Components

Individual parts or elements that collectively form a system, machine, or piece of equipment.

Assault Charges

Legal accusations pertaining to the attempt or threat to physically harm another person, which can result in criminal proceedings.