Fijisawa Inc. is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay would be
$1,900,000, and the project would generate incremental free cash flows of $650,000 per year for 5 years. The appropriate required rate of return is 9 percent.
a. Calculate the
NPV.
b. Calculate the
PI.
c. Calculate the
IRR.
d. Should this project be accepted?
a.
What
is the project’s
NPV?
$nothing
(Round to the nearest dollar.)
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