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Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or
Mario Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for Mario Brothers. Assume the discount rate for Mario Brothers is 12 percent.
| year | board game | DVD |
| 0 | - 1,700 | -3700 |
| 1 | 790 | 2250 |
| 2 | 1450 | 1670 |
| 3 | 310 | 1300 |
A. What is the payback period for each project?
Board Game:
DVD:
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