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

question 19

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 #3 is closest to:

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

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Definitions:

Regular basis

A consistent, repeated interval at which activities or events occur, whether daily, weekly, monthly, or on a similarly predictable schedule.

Spending time

The allocation of one's duration towards various activities or tasks over a period.

Interact regularly

The continuous engagement or communication between individuals or entities in a consistent and repeated manner.

Physical location

A specific geographic place or position identified by its physical coordinates or characteristics.