Question
Dandy's Fun Park is evaluating the purchase of a new game to be located on its Midway.? Dandy's has narrowed their choices down to? two:
Dandy's Fun Park is evaluating the purchase of a new game to be located on its Midway.? Dandy's has narrowed their choices down to? two: the Wacky Water Race game and the
Whackminus?Aminus?Mole
game. Financial data about the two choices follows.
Wacky Water Race | Whackminus?Aminus? Mole | |
Investment | ?$28,000 | ?$27,000 |
Useful life | 5 | 5 |
Estimated annual net cash inflows for 5 years | ?$10,000 | ?$3,000 |
Residual value | ?$2,000 | ?$5,000 |
Depreciation method | straightminus?line | straightminus?line |
Required rate of return | ?8% | ?10% |
What is the total present value of future cash inflows and residual value from the
Whackminus?Aminus?Mole
?game?
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