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 $122,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5.5 percent per year forever. The project requires an initial investment of $1,450,000.

(a)

If Yurdone requires a return of 15 percent on such undertakings, what is the NPV of the project?

(b)

Should the cemetery business be started? Yes or No (c)The company is somewhat unsure about the assumption of a growth rate of 5.5 percent 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? Minimum Growth Rate_______