Question: A local restaurateur who had been running a profitable business for many years recently purchased a liquor license to sell spirits in her restaurant. The cost of obtaining the license was $75,000, since only 300 such licenses are issued by the state. While the license is transferrable, only $65,000 is refundable if the owner chooses not to use it. After selling alcoholic beverages for about one year the restaurateur realized that she was losing dinner customers and that her profitable restaurant was turning into a noisy, unprofitable bar. Subsequently, she spent $6,000 placing advertisements in various newspapers and restaurant magazines across the state offering to sell the license for $70,000. After a long wait, she finally received an offer to purchase her license for $66,000. What is your opinion of the restaurateur decisions? Would you recommend that she accepts the $66,000 offer? Explain.

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