Problem $5-14$ Comparing Investment Criteria

Wii 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 the company. Assume the discount rate is $8$ percent.

Year$/$Board Game$/$DVD

$0/-$$$1,750/-$$$3,800$

$1/800/2,300$

$2/1,500/1,680$

$3/320/1,350$

a$.$ What is the payback period for each project? $($Do not round intermediate

calculations and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ What is the NPV for each project? $($Do not round intermediate calculations and

round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$.$ What is the IRR for each project? $($Do not round intermediate calculations and enter

your answers as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

d$.$ What is the incremental IRR? $($Do not round intermediate calculations and enter your

answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$