Use the Information Below to Answer the Following Question(s)

question 114

Multiple Choice

Use the information below to answer the following question(s) .
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.

-The net present value of the Wacky Water Race game is closest to

• A) $(5,299).
• B) $(3,045).
• C) $3,045.
• D) $5,299.

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Definitions:

Loanable Funds

The funds available within an economy for borrowing, influencing interest rates and capital availability.

Interest Rate

Fees assessed by a lending party on a borrowing party for asset usage, expressed in terms of the principal's percentage.

Rule of 70

A rule that estimates the number of years required to double an investment or population at a fixed annual growth rate, by dividing 70 by the percentage growth rate.

Annual Interest

The amount of interest earned or paid over a one-year period on investments, loans, or savings.