Cleveland Cove Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair.

Cleveland Cove Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair. The company has narrowed their choices down to two: the B14 Model and the F54 Model. Financial data about the two choices follows B14 Model F54 Model Investment $300,000 $280,000 Useful life (years) 8 8 Estimated annual net cash inflows for useful life $70,000 $50,000 Straight line 14% $33,000 $19,000 Straight-line 8% Residual value Depreciation method Required rate of return What is the net present value of the F54 Model? A. $80,089 negative B. $199,911 positive C. $332,000 positive D. $42,280 positive Data Table Present Value of $1 Periods 8% 10% 12% 14% 16% 0.410 6 0.630 0.564 0.507 0.456 7 0.583 0.513 0.452 0.400 0.354 8 0.540 0.467 0.404 0.351 0.305 0.500 0.424 0.361 0.308 0.263 10 0.463 0.386 0.322 0.270 0.227 i Data Table Present Value of Annuity of $1 Periods 8% 10% 12% 14% 16% 4.623 6 4.355 4.111 3.889 3.685 7 5.206 4.868 4.564 4.288 4.039 8 5.747 5.335 4,968 4.639 4.344 4.946 9 6.247 5.759 5.328 4.607 10 6.710 6.145 5.650 5.216 4.833