(Related to Checkpoint 11.1 and Checkpoint 11.4) (Calculating NPV, PI, and IRR) 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 $11 comma 300 comma 000, and the project would generate cash flows of $1 comma 150 comma 000 per year for 20 years. The appropriate discount rate is 6.8 percent.

a. Calculate the NPV.

b. Calculate the PI.

c. Calculate the IRR.

d. Should this project be accepted? Why or why not?

a. The NPV of the expansion is $ (Round to the nearest dollar.)

b. The profitability index of the expansion is . (Round to two decimal places.)

c. The IRR of the expansion is % (Round to two decimal places.)

d. Should this project be accepted? Why or why not?

(yes or no) because the NPV is (positive or negative) the IRR is (greater or less)

than the required discount rate, and the PI is (greater or less than) 1.