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

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Question

Finance

Fijisawa Inc. is considering a major expansion of its productline and has estimated the following cash flows associated withsuch an expansion. The initial outlay would be

​$2,000,000​,

and the project would generate incremental free cash flowsof

​$650,000

per year for

5

years. The appropriate required rate of return is

9

percent.

a. Calculate the

NPV.

b. Calculate the

PI.

c. Calculate the

IRR.

d. Should this project be​ accepted?

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