Problem:
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 $2,010,000 and the project would generate cash flows of $460,000 per year for 6 years. The appropriate discount rate is 8.6%
Required:
Question 1: Calculate the net present value
Question 2: Calculate the profibility index
Question 3: Calculate the internal rate of return
Note: Provide support for your rationale.