Problem $4$

Intro

Your company is considering building a factory for a new product. The factory

costs $$770,000$ and will produce a cash inflow of $$38,500$ in the first year. The

cash inflows are expected to grow by $5\%$ every year forever.

The required return for the project is $8\%.$

Part $1$

What is the NPV of the project?

$0+$ decimals

Part $2$

What is the break$-$even growth rate, i$.$e$.,$ the growth rate that sets the NPV to

zero?