(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
$2 comma 000 comma 0002,000,000,
and the project would generate incremental free cash flows of
$600 comma 000600,000
per year for
77
years. The appropriate required rate of return is
66
percent.a. Calculate the
NPV.
b. Calculate the
PI.
c. Calculate the
IRR.
d. Should this project be accepted?
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