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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. Wacky Wate Whack-A 0 nvestment Useful life stimated annual net cash inflows for 8 Residual value Required rate of return Using the net present value model, which alternative(s) should Family Fun Park select? Present Value of $1 reciation method straight-line straight-lin 8 10% 0.926 0.794 0.681 0.583 12% 0.893 0.797 0.712 0.636 0.567 2 3 4 0.751 0.683 0.621 6 0.790 0.760 0.731 0.665 0.627 0.513 0.540 0.404 Present Value of Annuity of $1 12% 0.893 1.690 2.402 10% 0.909 2 3 4 0.962 1.886 2.775 0.943 2.673 4.212 0.926 1.783 2.577 2.487 3.170 3.791 4.452 3.993 4.623 5.206 5.747 3.605 6 6.002 6.733 4.868 6.210 A) Both investments should be selected. B) The Wacky Water Race game should be selected C) Neither investment should be selected. D) The Whack-A-Mole game should be selected
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