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

question 89

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 #1 is closest to:

• A)$350,000.
• B)$357,000.
• C)$375,500.
• D)$400,000.

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Definitions:

Diverse Interests

A wide range of hobbies, preferences, and pursuits that vary greatly among individuals or groups.

Multiple Channels

The use of various platforms or mediums for communication or distribution, such as in marketing or broadcasting.

Sketching

The act of drawing quickly and roughly to capture the basic shape and features of an object or scene, often used as a preliminary step in the design process.

Discovery Techniques

Methods or strategies used to uncover facts, insights, or information that was previously unknown or not understood.