Consider the following cash flows of the two mutually

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 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	-$	1,000		-$	2,300
1		650			1,550
2		700			1,350
3		170			600

a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Payback period
Board game	years
DVD	years

b. 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. 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	%

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., 32.16.)

Incremental IRR %