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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 WhackminusAminusMole game. Financial data about the two choices follows.
| Wacky Water Race | WhackminusAminus Mole | |
| Investment | $28,000 | $15,000 |
| Useful life | 8 | 8 |
| Estimated annual net cash inflows for 88 years | $10,000 | $8,000 |
| Residual value | $4,000 | $1,000 |
| Depreciation method | straightline | straightline |
| Required rate of return | 4% | 10% |
What is the net present value of the Wacky Water Race game?
A.$42,254
B. $42,254
C.$27,680
D.$27,680
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