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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 8 percent. Year Board Game -$1,250 0 DVD $2,800 1,800 1,580 850 1 2 3 700 1,000 220 a. What is the payback period for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Payback period Board game DVD b. What is the NPV for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) NPV Board game $ DVD $ c. What is the IRR for each project? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) IRR Board game % DVD % d. What is the incremental IRR? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Incremental IRR %
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