Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market...

80.2K

Verified Solution

Question

Finance

Wii Brothers, a game manufacturer, has a new idea for anadventure game. It can market the game either as a traditionalboard game or as an interactive DVD, but not both. Consider thefollowing cash flows of the two mutually exclusive projects for thecompany. Assume the discount rate is 9 percent.

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? (Do notround intermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
b. What is the NPV for each project? (Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
c. What is the IRR for each project? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.)
d. What is the incremental IRR? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)

Answer & Explanation Solved by verified expert

3.9 Ratings (767 Votes)

Board See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Wii Brothers, a game manufacturer, has a new idea for anadventure game. It can market the game either as a traditionalboard game or as an interactive DVD, but not both. Consider thefollowing cash flows of the two mutually exclusive projects for thecompany. Assume the discount rate is 9 percent. YearBoard GameDVD0–$800–$1,90016101,35025009503130400 a.What is the payback period for each project? (Do notround intermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)b.What is the NPV for each project? (Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)c.What is the IRR for each project? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.)d.What is the incremental IRR? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)

a.	What is the payback period for each project? (Do notround intermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
b.	What is the NPV for each project? (Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)
c.	What is the IRR for each project? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.)
d.	What is the incremental IRR? (Do not round intermediatecalculations and enter your answer as a percent rounded to 2decimal places, e.g., 32.16.)