Define the initial outlay associated with the expansion

Reference no: EM13203564

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 associated with the expansion would be $1,950,000, and the project would generate free cash flows of $450,000 per year for six years. The appropriate required rate of return is 9 percent.

a.Calculate the net present value.

b. Calculate the profitability index.

c. Calculate the internal rate of return.

d. Should this project be accepted?

Reference no: EM13203564

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