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XYZ Corporation wants to set up a business. According to the cfo, business is looking up. As a result , the business will provide a
XYZ Corporation wants to set up a business. According to the cfo, business is looking up. As a result , the business will provide a net cahflow of $300000 for the firm during the first year and the cash flows are projected to grow at a rate of 6% per year forever. The project requires an initial investment of $4000000. The company is somewhat unsure about the assumption of a growth rate of 6% in its cash flows. At what constant growth rate would the company just breakeven if it requires a return of 12% on investment
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