Calculate the net present value and profitability index

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Reference no: EM13868455

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 $2,080,000, and the project would generate cash flows of $430,000 per year for six years. The appropriate discount rate is 5.2 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?

Reference no: EM13868455

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