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 12 percent.

Year Board Game DVD

0 -$1,700 -$3,700

1 790 2,250

2 1,450 1,670

3 310 1,300

What is the payback period for each project?

Payback period

Board game years

DVD years

What is the NPV for each project?

NPV

Board game$

DVD$

What is the IRR for each project?

IRR

Board game %

DVD %

What is the incremental IRR?