Mario Brothers, a game manufactures, has a new idea for an adventure game. It can...
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Finance
Mario Brothers, a game manufactures, has a new idea for an adventure game. It can market the game either as a traditional board game or as an online game. Consider the following cash flows of two independent projects. Assume the required return for both projects is 10%. Given this information, which one of the following statements is correct?
Year
Board Game: Project A
Online Game: Project B
0
-$75,000
-$172,500
1
$29,000
$56,000
2
$30,250
$78,000
3
$35,480
$100,400
Group of answer choices
You should accept both projects based on both the NPV and IRR decision rules.
You should accept Project B and reject Project A based on their respective NPVs.
You should accept Project A and reject Project B based on their respective NPVs.
You should accept Project B and reject Project A based on their respective IRRs.
You should accept Project A and reject Project B based on their respective IRRs.
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