Question

Sorry I wasn't finished with the 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 $1,980,000, and the project would generate incremental free cash flows of $490,000 per year for 6 years. The appropriate required rate of return is 10.8 percent.

a. calculate the net present value
b. calculate the profitability index
c. calculate the internal rate of return