(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 $1,900,000 and the project would generate incremental free cash flows of 700,000 per year for 6 years.

The appropriate required rate of return is 6 percent.

a. Calculate the NPV.

b. Calculate the PI.

c. Calculate the IRR.

d. Should this project beaccepted?

a. What is theproject's NPV?

(Round to the nearestdollar.)

b. What is theproject's PI?

(Round to three decimalplaces.)

c. What is theproject's IRR?

% (Round to two decimalplaces.)

d. Should this project beaccepted?(Select the best choicebelow.)

A.

No. The project should be rejected because theproject's NPV isnegative, PI is less thanone, and IRR is less than the required rate of return.

B.

Yes. The project should be accepted because theproject's NPV ispositive, PI is greater thanone, and IRR is greater than the required rate of return