Question

Cleveland Cove Enterprises is evaluating the purchase of an elaborate hydraulic lift system for all of...

Cleveland Cove Enterprises 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 B14 Model and the F54 Model. Financial data about the two choices follows.

B14 Model

F54 Model

Investment

$350,000

$260,000

Useful life​ (years)

10

10

Estimated annual net cash inflows for useful life

$80,000

$36,000

Residual value

$20,000

$11,000

Depreciation method

Straight−line

Straight−line

Required rate of return

14​%

8%

What is the net present value of the B14​ Model?

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