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NPV of Growing Perpetuity The Yurdead Corporation wants to set up a private cremation business. According to the CFO, Barry M. Deep, people are dying
NPV of Growing Perpetuity The Yurdead Corporation wants to set up a private cremation business. According to the CFO, Barry M. Deep, people are dying to take advantage of their services. He has projected that the company will make $52,000 in the first year, and cash flows are expected to grow at 5% per year thereafter. The project requires an initial investment of $900,000. Barry has assessed the company's cost of capital to be 11%. Should he undertake the opportunity? Barry is unsure of the growth rate and wants to do a bit of sensitivity analysis around this rate. At the 11% rate of return, what is the breakeven growth rate for this project
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