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Comparing Investment Criteria Mario Brothers, a sport producer, has a new idea for an exploration sport. It can market the game either as a traditional board game or as an interrelated DVD, whereas not both. Consider the following cash flows of the two mutually exclusive projects for Mario Brothers. Assume the discount rate for Mario Brothers is 10 % Year 0 is -$600 on Board Game and -$1,900 on DVD. Year

1 is $700 on Board Game and $1,400 on DVD. Year2 is $150 on Board Game and $900 on DVD. Year3 is $100 on Board Game and $400 on DVD.

a. depends on the payback period rule, explain which project should be chosen?

b. depends on the NPV, explain which project should be chosen?

c. As depends on the IRR, explain which project should be chosen?

d. Based on the increasing IRR, explain which project ought to be chosen?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9722671

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