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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:

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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: the Wacky Water Race game and the Whack-A-Mole game. Financial data about the two choices follows. Wacky Water Whack-A- Race Mole Investment $32,000 $22,000 Useful life 8 8 Estimated annual net cash inflows for 8 years $10,000 $5,000 Residual value $3,000 $2,000 Depreciation method straight-line straight-line Required rate of return 8% 10% What is the net present value of the Wacky Water Race game? O A. $(4,675) OB. $27,090 O C. $4,675 OD. $(27,090) Present Value of $1 Periods 4% 6% 8% 10% 12% 1 0.962 0.943 0.926 0.909 0.893 2 0.925 0.890 0.857 0.826 0.797 3 0.889 0.840 0.794 0.751 0.712 4 0.855 0.792 0.735 0.683 0.636 5 0.822 0.747 0.681 0.621 0.567 6 0.790 0.705 0.630 0.564 0.507 7 0.760 0.665 0.583 0.513 0.452 8 0.731 0.627 0.540 0.467 0.404 Present Value of Annuity of $1 Periods 4% 6% 8% 10% 12% 1 0.962 0.943 0.926 0.909 0.893 2 1.886 1.833 1.783 1.736 1.690 3 2.775 2.673 2.577 2.487 2.402 4 3.630 3.465 3.312 3.170 3.037 5 4.452 4.212 3.993 3.791 3.605 6 5.242 4.917 4.623 4.355 4.111 7 6.002 5.582 5.206 4.868 4.564 8 6.733 6.210 5.747 5.335 4.968

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