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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 Whack - A - Mole game. Financial data about the two choices follows. Investment Useful life Estimated annual net cash inflows for 8 years Residual value Depreciation method Required rate of return Wacky Water Race $33,000 8 $10,000 $4,000 straight-line 8% Whack-A- Mole $22,000 8 $8,000 $4,000 straight-line 12% Using the net present value model, which alternative(s) should Family Fun Park select? O A. The Whack - A - Mole game should be selected.and net present value is $7,270 lower. B. The Wacky Water Race game should be selected and net present value is $7,270 higher. O C. The Wacky Water Race game should be selected and net present value is $6,726 higher. OD. The Wacky Water Race game should be selected and net present value is $6,726 lower
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