(Present Value Tables Are Needed Required:
A

question 135

Essay

(Present value tables are needed.)Golden Corporation is evaluating the purchase of an elaborate hydraulic lift system for all of its locations to use for the boats brought in for repair.The company has narrowed their choices down to two: the C23 Model and the Q12 Model.Financial data about the two choices follows.
$\begin{array}{|l|c|c|c|}\hline&\mathrm{C} 23 & \mathrm{Q} 12 \\\hline \text { Investment } & \$360,000 & \$ 165,000 \\\hline \text { Useful life (years) } & 8 & 8 \\\hline \text { Estimated annual net cash inflows for useful life } & \$ 80,000 & \$ 25,000 \\\hline \text { Residual value } & \$ 20,000 & \$ 12,000 \\\hline \text { Depreciation method } & \text {straight-line } & \text { straight-line } \\\hline \text { Required rate of return } & 14 \% & 10 \% \\\hline\end{array}$
Required:
a.Calculate the net present value of the Q12 Model.
b.Calculate the net present value of the C23 Model.
c.Using the net present value method,which alternative should Golden Corporation select?

---

Definitions:

Conditioning

A behavioral process whereby a response becomes more frequent or predictable in a given environment due to reinforcement.

Twin Studies

A research method in which researchers assess hereditary influence by comparing the resemblance of identical twins and fraternal twins on a trait.

Hereditary Influences

The impact of genetic factors inherited from parents on an individual's traits, behavior, and health.

Identical Twins

Twins that develop from a single fertilized egg that splits and forms two embryos, sharing 100% of their DNA.