Fijisawa, Inc. is considering a major expansion of its product line and has estimated the following...

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 $11,800,000, and the project would generate cash flows of $1,300,000 per year for 20 years. The appropriate discount rate is 7.4 percent.

a. Calculate the NPV.

b. Calculate the PI.

c. Calculate the IRR.

d. Should this project be accepted? Why or why not?

Solutions

Expert Solution

d) Project should be accepted. This is because NPV is positive and would add value to the firm, if accepted.

jeff jeffy answered 1 year ago

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