The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is...
Swens1The 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 $43,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5 percent per year forever. The project requires an initial investment of $741,000. |
Required: |
a. | If Yurdone requires a 12 percent return on such undertakings, the NPV of the project is $ be started. |
b. | The company is somewhat unsure about the assumption of a 5 percent growth rate in its cash flows. The company would just break even at a constant growth rate of [removed]percent (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) if it still required a 12 percent return on investment. |
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