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.

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. If the interest rate is 7%, the NPV of alternative #1 is closest to: a. $357,000 b. $350,000 c. $375,500 d. $400,000

Answers I have come across on the internet are as follows:

b $350,000 Since there are no costs involved in selling and owner can sell it now. [I am not sure this is right though]

And another from Course Hero:

If the interest rate is 7%, the alternative with the highest NPV is: alternative #1 with an NPV of approximately $350,000. alternative #2 with an NPV of approximately $370,561. alternative #3 with an NPV of approximately $357,196. alternative #2 with an NPV of approximately $380,561.

[I don't understand this answer and if this is correct could someone explain it and show the math please, Thanks so much!]