Firm ABC wants to set up an electric car battery business.According to the CEO, the business will bring the first net cash inflow of $990,000, received one year from today, and subsequent annual cash flows are projected to grow at a rate of six percent per year forever. The business requires an initial investment of $19,900,000.

1. If firm ABC requires a return of nine percent on this business, should the electric car battery business be started?(2 marks)
2. Firm ABC is not sure about the growth rate of six percent in its cash flows.At what constant growth rate would firm ABC just break even if it still requires a return of nine percent on investment?(2 marks)