Dandy's Fun Park Is Evaluating the Purchase of a New

question 88

Multiple Choice

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. Using the net present value model, which alternative(s) should Family Fun Park select?
Present Value of $1
Present Value of Annuity of $1

• A)The Whack-A-Mole game should be selected.
• B)Neither investment should be selected.
• C)Both investments should be selected.
• D)The Wacky Water Race game should be selected.

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Definitions:

Board of Directors

A group of elected individuals who represent shareholders' interests, oversee management, and make strategic decisions for a corporation.

Business Judgment Rule

A legal principle that protects corporate directors and officers when making business decisions, assuming those decisions are made in good faith and with due care.

Duty of Care

The legal obligation of a person to exercise a reasonable standard of care while performing any acts that could foreseeably harm others.

Officer

An individual appointed or elected to an executive position within an organization, often with specific duties and responsibilities.