The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is...

profileSwens1

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 $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.

    • 9 years ago
    • 20
    Answer(1)

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      yurdone_corp.docx
    Bids(0)