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In: Finance

(​NPV, ​PI, and IRR calculations​) Fijisawa Inc. is considering a major expansion of its product line...

(​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 ​$1, 850,000

and the project would generate incremental free cash flows of

​$650,000 per year for 66 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?

Solutions

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