NPV, IRR and PI calculation on excel.
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Fijisawa, Inc., is considering a major expansion of its product line and has estimated the following free cash flows associated with such an expansion. The initial outlay associated with the expansion would be $1,950,000, and the project would generate free cash flows of $450,000 per year for six years. The appropriate required rate of return 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?
How do I set this up in Excel
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Solution Summary
This solution shows the calculation of NPV, PI, and IRR in excel. A final decision of whether to accept the project is also included.
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