You own a small piece of commercial land near a university. You are considering what to do with it. You have been approached recently with an offer to buy it from you. The offer would pay $225,000 up front and $125,000 at the end of the next year. You are also considering three alternative uses of the land for yourself: a laundromat, a bakery, and a bike shop. You assume that you would operate your choice indefinitely, eventually leaving the business to your children.

Business Option	Capital Investment	Cash Flow in Year 1	Expected Growth Rate (forever)	Cost of Capital
Laundromat	$415,000	$55,000	4.0%	12.5%
Bakery	$405,000	$48,000	4.5%	12.0%
Bike Shop	$485,000	$65,000	5.0%	13.0%

Required: Using the information provided, determined the preferred option. [10 marks]