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 %?

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.