Fijisawa, Inc., is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay associated with the expansion would be $1,960,000, and the project would generate free cash flows of $500,000 per year for six years. The appropriate required rate of return is 12.6 percent.
a) calculate the NPV
b) calculate the PI
c) calculate the IRR
d) should this project be accepted