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

question 24

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 alternative with the highest NPV is:

• A)Alternative #1 with an NPV of approximately $350,000.
• B)Alternative #2 with an NPV of approximately $370,561.
• C)Alternative #3 with an NPV of approximately $357,196.
• D)Alternative #2 with an NPV of approximately $380,561.

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Definitions:

Sclera

The white, outer layer of the eyeball, providing structure and protection for the inner components of the eye.

Cornea

The transparent front part of the eye that covers the iris, pupil, and anterior chamber, responsible for focusing most of the light entering the eye.

Corneal-Scleral Junction

The area where the cornea, the clear front surface of the eye, meets the sclera, the white, outer layer of the eyeball.

Sensory Adaptation

A process in which the same chemical can stimulate receptors only for a limited amount of time until the receptors eventually no longer respond to the chemical.