5)

Family Fun Park is evaluating the purchase of a new game to be located on its Midway. Family Fun has narrowed their choices down to two; the Wacky Water Race game and the Whack-A-Mole game. Financial data about the two choices follows:

Investment: Wacky Water Race - $32,000; Whack-A-Mole - $22,000

Useful Life: Wacky Water Race - 5; Whack-A-Mole - 5

Estimated annual net cash inflows for 5 years: Wacky Water Race - $8,000; Whack-A-Mole - $6,000

Residual Value: Wacky Water Race - $2,000; Whack-A-Mole - $1000

Depreciation method: Wacky Water Race - straight-line; Whack-A-Mole - straight-line

Required rate of return: Wacky Water Race - 8%; Whack-A-Mole - 10%

What is the total present value of future cash inflows and residual value from Whack-A-Mole game? (The present value for this scenario is .621 and the present value of annuity for this scenario is 3.791).

A) $22,746

B) $23,367

C) $24,579

D) $45,367