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Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional game or as

Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional game or as an interactive DVD, but not both. Consider the follwing cash flows of the two mutually exclusive projects for the company. Assume the discount rate is 9%. Please show your work.

Year Board Game DVD
0 -$800 -$1,900
1 610 1,350
2 500 950
3 130 400

A) What is the payback period for each project?

B) What is the NPV for each project?

C) What is the IRR for each project?

D) What is the incremental IRR?

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