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:

James-Lange Theory

A theory of emotion that suggests emotions occur as a result of physiological reactions to events.

Facial Expression

The use of facial muscles to convey emotions or reactions non-verbally.

Two-factor Theory

A concept in psychology suggesting that emotional experiences arise from a combination of physiological arousal and a cognitive label applied to the source of the arousal.

Cognitive Label

A cognitive label refers to the identification and categorization of an experience or emotion based on cognitive processing.