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The Yurdone Corporation wants to set up a private cemetary business. According to he CFO, Barry M. Deep, business is looking up. As a result,
The Yurdone Corporation wants to set up a private cemetary business. According to he CFO, Barry M. Deep, business is "looking up." As a result, the cemetery project will provide a net cash inflow of $85,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 6 percent per year forever. The project requires an initial instvestment $1,400,000. A. If Yurdone requires a 13 percent return on such undertakings, should the cemetary business be started? B. The company is somewhat unsure about the assumption of a 6 percent growth rate in its cach flows. At what constant growth rate woud the company just break even if it still required a 13percent return on investment
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