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 $10,100,000 and the project would generate incremental free cash flows of $1,270,000 per year for 20 years. The appropriate required rate of return is 9.5 percent.   a. Calculate the NPV. b. Calculate the PI. c. Calculate the IRR. d. Should this project be accepted?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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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 $10,100,000 and the project would generate incremental free cash flows of $1,270,000 per year for 20 years. The appropriate required rate of return is 9.5 percent.

 

a. Calculate the NPV.

b. Calculate the PI.

c. Calculate the IRR.

d. Should this project be accepted?

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