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The Cloud Corporation wants to set up a private parking business. According to the CFO, business is looking up . As a result, the parking

The Cloud Corporation wants to set up a private parking business. According to the CFO, business is looking up. As a result, the parking project will provide a net cash inflow of $75,000 for the firm during the first year and the cash flows are projected to grow at a rate of 6% after that, forever. The project requires an initial investment of $1,050,000.
a). If Cloud Corp. requires a 13 percent return on such undertakings, should the cemetery business be started?
b). The company is somewhat unsure about the assumption of 6% growth rate in its cash flows. At what constant growth rate would the company just break even, if it still required a 13 percent return on investment?

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