Problem:

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 $2,010,000 and the project would generate cash flows of $460,000 per year for 6 years. The appropriate discount rate is 8.6%

Required:

Question 1: Calculate the net present value

Question 2: Calculate the profibility index

Question 3: Calculate the internal rate of return

Note: Provide support for your rationale.