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(NPV, PI, and IRR calculations) 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 $430,000 per year for 6 years. The appropriate discount rate is 10.2 percent.

a. Calculate the NPV.

b. Calculate the PI.

c. Calculate the IRR.

d. Should this project be accepted?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91264333

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