A Game manufacturer has a new idea for an Adventure game. It can lauch the game as a board game or an Interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive...

A Game manufacturer has a new  idea for an Adventure game. It can lauch the game as a board game or an Interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects. Assume the discount rate is 12%.

Year  Board Game    DVD

0      -$950             -$2,200

1       $650             $1,500

2      $650             $1,250

3      $160              $150

a) What is the payback period for each project? in years?

b) What is the NPV for each project?

c) What is IRR for each project? in %?

d) What is the incremental IRR? in %?