Question
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
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 11 percent.
Year | Board Game | DVD | ||||
0 | $ | -1,150 | $ | -2,600 | ||
1 | 680 | 1,700 | ||||
2 | 900 | 1,560 | ||||
3 | 200 | 750 | ||||
1. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
NPV | ||
Board game | $ | |
DVD | $ | |
c. | 2. 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., 32.16.) |
IRR | ||
Board game | % | |
DVD | % | |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started