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2. The Yurdone Corporation wants to set up a private cemetery business. After analysis, the CFO believes the project will provide a net cash flow
2. The Yurdone Corporation wants to set up a private cemetery business. After analysis, the CFO believes the project will provide a net cash flow of $290,000 for the firm during the first year. Thereafter, the cash flow is expected to grow at 5% per year forever. The project requires an initial investment of $3,900,000. a. If the company requires an 11% return on this project, should it invest in this project? b. The company is somewhat unsure about the assumption of 5% growth in net cash flow. At what constant growth rate would the company just break even if it still required an 11% return on investment
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