Question 3 (Comparing Investment Criteria): Mario Brothers, a game manufacturer, has a new idea for...
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Question 3 (Comparing Investment Criteria): Mario 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 Mario Brothers. Assume the discount rate for Mario Brothers is 8 percent. a. Based on the payback period rule, which project should be chosen? (4 points) b. Based on the NPV, which project should be chosen? (8 points) c. Based on the IRR, which project should be chosen? (8 points)
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