Question: Please show all intermediate steps and formulas used. Use excel to complete the problem. The Yurdone Corporation wants to set up a private cemetery business.
Please show all intermediate steps and formulas used. Use excel to complete the problem.
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 $104,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 3 percent per year forever. The project requires an Initial Investment of $1,570,000. a-1. What is the NPV for the project if the company requires a return of 12 percent? (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. Should the company accept or reject the project? b. The company is somewhat unsure about the assumption of a growth rate of 3 percent in its cash flows. At what constant growth rate would the company Just break even if it still required a return of 12 percent on Investment? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a-1 NPV a-2. Accept/Reject b. Growth rate 96
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