Question: Fijisawa Inc is considering a major expansion of its product

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?




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  • CreatedOctober 31, 2014
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