In: Finance
(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?