(Present Value Tables Are Needed - What Is the Total Present Value of Future Cash

question 87

Multiple Choice

(Present value tables are needed.) Corky's Amusement Park is evaluating the purchase of a new game to be located on its Midway.Corky'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. $\begin{array}{|l|r|r|}\hline &\text { Wacky Water } & \text { Whack-A- } \\&\text { Race } & \text { Mole }\\\hline \text { Investment } & \$ 32,000 & \$ 22,000 \\\hline \text { Useful life } & 5 & 5 \\\hline \begin{array}{l}\text { Estimated annual net } \\\text { cash inflows for 8 years }\end{array} & \$ 9,000 & \$ 5,000\\\hline \text { Residual value } & \$ 2,000 & \$ 1,000 \\\hline \text { Depreciation method } & \text { straight-line } & \text { straight-line } \\\hline \text { Required rate of return } & 8 \% & 10 \%\\\hline\end{array}$

- What is the total present value of future cash inflows from the Wacky Water Race game?

• A)$ 5,299
• B)$19,576
• C)$35,481
• D)$37,299

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Definitions:

Hybridization

The concept of mixing atomic orbitals to create new hybrid orbitals for bonding, explaining the geometry of molecular structures.

Nitrogen Atom

An atom of the element nitrogen, which has the chemical symbol N and is essential for all living organisms as it is a key component of amino acids and nucleic acids.

CCC Bond Angle

The angle between three carbon atoms in a molecular structure, which can vary depending on the specific geometry of the molecule.

Compound

A chemical substance made up of two or more elements combined in a specific ratio, distinct in its chemical composition and properties.