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Comparing Investment Criteria Mario Brothers, a game manufacturer, has new idea for an adventure game. It can either market the game as a traditional board
- Comparing Investment Criteria Mario Brothers, a game manufacturer, has new idea for an adventure game. It can either market the game as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects. Assume the discount rate for both projects is 10%
| Year | Board Game | DVD |
| 0 | -$345,000 | -$570,000 |
| 1 | 265,000 | 360,000 |
| 2 | 150,000 | 290,000 |
| 3 | 98,000 | 185,000 |
- Based on the payback period rule, which project should be chosen?
- Based on NPV, which project should be chosen?
- Based on the IRR, which project should be chosen?
- Based on the incremental IRR, which project should be chosen?
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Empirical Finance For Finance And Banking
Authors: Robert Sollis
1st Edition
047051289X, 978-0470512890
