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The ABC Inc., wants to set up a private cemetery business. According to the CFO, John Smith, business is looking up. As a result, the
The ABC Inc., wants to set up a private cemetery business. According to the CFO, John Smith, business is looking up. As a result, the cemetery project will provide a net cash inflow of $40,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 7 percent per year forever. The project requires an initial investment of $650,000. If ABC Inc., requires a 14 percent return on such undertakings, should the cemetery business be started?
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