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PLEASE HELP DUE SOON The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is looking
PLEASE HELP DUE SOON
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 $130,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 6.3 percent per year forever. The project requires an initial investment of $1,530,000. a. If the company requires a return of 15 percent on such undertakings, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16 . b. The company is somewhat unsure about the assumption of a growth rate of 6.3 percent in its cash flows. At what constant growth rate would the company just break even if it still required a return of 15 percent on its investment? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 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 $130,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 6.3 percent per year forever. The project requires an initial investment of $1,530,000. a. If the company requires a return of 15 percent on such undertakings, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16 . b. The company is somewhat unsure about the assumption of a growth rate of 6.3 percent in its cash flows. At what constant growth rate would the company just break even if it still required a return of 15 percent on its investment? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16 Step by Step Solution
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