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

question 66

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 discount rate is 15%,the alternative with the highest NPV is:

• A)#1 with an NPV of approximately $350,000.
• B)#2 with an NPV of approximately $341,300.
• C)#3 with an NPV of approximately $329,570.
• D)#2 with an NPV of approximately $400,000.
• E)None of the above

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Definitions:

Rules and Standards

Defined as established guidelines and criteria used to manage conduct, processes, and procedures within organizations and industries.

Path-Goal Theory

A leadership theory that suggests a leader's behavior is contingent to the satisfaction, motivation, and performance of their subordinates.

Leadership Style

Leadership style refers to the behavior and approach of a leader, guiding how they interact with their team, make decisions, and motivate people towards achieving goals.

Situational-Leadership

A leadership style that changes based on the needs of the team and circumstances, emphasizing adaptability.