[Solved] Use the Information Below to Answer the Following Question(s

Question 27
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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