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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 $130,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5 percent per year forever. The project requires an initial investment of $1,800,000. If Yurdone requires a 10 percent return on such undertakings, what is the NPV of this project? (HINT: Growing perpetuity....How much money do you make ore lose on this project?)
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