Thaizya 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 CD-ROM, but not both. Consider the following cash flows of the two mutually exclusive projects for Thaizya Brothers. Assume the discount rate for Thaizya Brothers is 10 percent. Year Board Game (K’million) CD-Rom (K’mllion) 0 (600) (1,900) 1 700 1,400 2 150 900 3 100 400 Required: 

A. Based on the Payback Period rule, which project should be chosen? 

B. Based on the NPV, which project should be chosen?  

C. Based on the IRR, which project should be chosen?

Answer rating: 100% (QA)

computation of NPV IRR Payback Cash flows PVIF10 Present value Simple cu... View the full answer