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Major expansion of its product line

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Fijisawa Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay would be $1,800,000,and the project would generate incremental free cash flows of $550,000 per year for 7 years. The appropriate required rate of return is 8 percent.

a. Calculate the NPV. (round to the nearest dollar)

b. Calculate the PI. (round three decimal places)

c. Calculate the IRR. (round two decimal places)

d. Should this project be accepted? (yes or no)

Reference no: EM131401580

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