Question: E) 8.03; accept 43,200 /21.03 or= 8034 NPV Challenge Problem 8. The Yurdone Corporation wants to set up a private cemetery business. According to the
E) 8.03; accept 43,200 /21.03 or= 8034 NPV Challenge Problem 8. The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up". As a result, the cemetery project will provide a net cash inflow of $145,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 4 percent per year forever. The project requires an initial investment of $1,900,000. A. If the company requires an 11 percent return on such undertakings, should the cemetery business be started? B. The company is somewhat unsure about the assumption of a growth rate of 4 percent in its cashflows. At what constant growth rate will the company just break even if it still required a 11 percent return on investment
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