(Related to Checkpoint 11.1 on page 335 and Checkpoint 11.4 on page 344) (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 $1,950,000, and the project would generate cash flows of

$450,000 per year for six years. The appropriate discount rate is 9 percent.

a. Calculate the net present value.

b. Calculate the profitability index.

c. Calculate the internal rate of return.

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