Question: melon husk co is evaluating a new expansion project. the financial team is working on determining the estimated growth rate for this venture and the
melon husk co is evaluating a new expansion project. the financial team is working on determining the estimated growth rate for this venture and the annual cash flows are projected to grow at a rate of 8.0% per year forever. however they are unsure about the growth rate assumption. the expansion requires an initial investment of 88,000 and it will provide a net cash inflow of 6400 in year 1 and 5800 in year 2. for subsequent years, the net cash inflow will grow indefinitely. if the cost of capital is 15.3% what minimum constant rate of growth should the company seek in the project to make is feasible
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