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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 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 $124,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5.7 percent per year forever. The project requires an initial investment of $1, 470,000. Required: If Yurdone requires a return of 13 percent on such undertakings, what is the NPV of the project? Should the cemetery business be started? (c) The company is somewhat unsure about the assumption of a growth rate of 5.7 percent its cash flows. At what constant growth rate would the company just break even if it still required a return of 13 percent on its investment
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