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I need help answering (a)-(d). (NPV, PI, and IRR calcufations) Fijisawa Inc. is considering a major expansion of its product line and has estimated the
I need help answering (a)-(d).
(NPV, PI, and IRR calcufations) 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 oullay would be $2,000,000, and the project would generate incremental free cash flows of $550,000 per year for 6 years. The appropriate required rate of return is 7 percent a. Calculate the NPV b. Calculate the P c. Calculate the IRR. d. Should this project be accepted? a. What is the project's NPV? (Round to the nearest dollar.) b. What is the project's Pr (Round to three decimal places.) c. What is the project's IRR? loudo w deinl lato) d. Should this project be accepted? (Select the best choice below.) O A. Yes. The project should be accepted because the project's NPV is positive, Pl is greater than one, and IRR is greater than the required rate of return O B. No. The project should be rejected because the project's NPV is negative, Pl is less than one, and IRR is less than the required rate of returnStep by Step Solution
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