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X a. NPV = - $67,857.14 b.g = 6,51% NPV Valuation The Yurdone Corporation wants to set up a private cemetery busi- ness. According to
X a. NPV = - $67,857.14 b.g = 6,51% NPV Valuation The Yurdone Corporation wants to set up a private cemetery busi- ness. According to the CFO, Barry M. Deep, business is looking up. As a result, the cemetery project will provide a net cash inflow of $60,000 for the firm during 8 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 investment of $925,000. a. If Yurdone requires a 13 percent return on such undertakings, should the cem- etery business be started? b. The company is somewhat unsure about the assumption of a 6 percent growth rate in its cash flows. At what constant growth rate would the company just break even if it still required a 13 percent return on investment
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