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10) The Yurdone Corporation wants to set up a private Cemetery business. According to the CFO, business is looking up. As a result, the Cemetery
10) The Yurdone Corporation wants to set up a private Cemetery business. According to the CFO, business is looking up. As a result, the Cemetery project will provide a net cash flow of $164,000 for the firm during the first year, and cash flows are projected to grow at a rate of 4.7% per year forever. The project requires an initial investment $1,825,000. 10a) if the company requires a return of 12% on such undertakings, should the Cemetery business be started? 10b) The company is somewhat unsure about the assumption of a 4.7% growth rate in its cash flow. At what constant growth rate would the company just break even? If it still required a return of 12% on its investment
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