Fijisawa, Inc., is considering a major expansion of its productline and has esti

Question

Fijisawa, Inc., is considering a major expansion of its productline and has estimated the following free cash flows associatedwith such an expansion. The initial outlay associatedwith the expansion would be $2,010,000, and the project would generate free cash flows of $350,000 per year for six years. The appropriate required rate of return is -0.2 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? First question: The NPV of the expansion is $ ___? (round to the nearest dollar)

Explanation / Answer

1)

I am assuming that you require the answer for first question as per your post

Required rate of return = -0.20% Year 0 1 2 3 4 5 6 Project A -2010000 350000 350000 350000 350000 350000 350000

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