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.

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Definitions:

Diffusion

The movement of particles from an area of higher concentration to an area of lower concentration, leading to the equal distribution of the particles.

Tubular Reabsorption

The process by which solutes and water are removed from the tubular fluid in the kidneys and re-enter the bloodstream, aiding in waste removal and water balance.

Solutes

Substances dissolved in a solvent to form a solution, typically found in a lesser amount compared to the solvent.

Urine Formation

The physiological process involving filtration, reabsorption, and secretion by the kidneys to remove waste products from the blood and produce urine.