​(​NPV, ​PI, and IRR calculations​) 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 would be ​$1,850,000​, and the project would generate incremental free cash flows of​ $500,000 per year for 5 years. The appropriate required rate of return is 8 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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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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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 free cash flows associated with such an expansion. The initial outlay would be ​$1,850,000​, and the project would generate incremental free cash flows of​ $500,000 per year for 5 years. The appropriate required rate of return is 8 percent.
 
a. Calculate the NPV.
b. Calculate the PI.
c. Calculate the IRR.
d. Should this project be​ accepted?
 
 
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