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 $$103,000$ for the firm during the first year, and the cash flows

are projected to grow at a rate of $4$ percent per year forever. The project requires an

initial investment of $$1,560,000.$

a$-1.$ What is the NPV for the project if the company's required return is $10$ percent? $($A

negative answer should be indicated by a minus sign. Do not round intermediate

calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

NPV

a$-$ If the company requires a return of $10$ percent on such undertakings, should the

cemetery business be started?

Yes

No

b$.$ The company is somewhat unsure about the assumption of a growth rate of $4$

percent in its cash flows. At what constant growth rate would the company just break

even if it still required a return of $10$ percent on investment? $($Do not round

intermediate calculations and enter your answer as a percent rounded to $2$

decimal places, e$.$g$.,32\mathrm{.}16.)$

Constant growth rate