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:

Resultant Strategic Decisions

Decisions made at a strategic level as a result of analyzing data and insights, influencing the direction of an organization.

Key Aspects

The most important, critical, or essential parts or features of something.

E-commerce

The buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet.

Social Commerce

The delivery of electronic commerce activities and transactions through social computing.