constant growth rate would the company just break even if it still required a return of 11 percent on investment?
The Yurdone Corporation wants to set up a private cemetery business. According to the CFO Barry M. Show more 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 $100000 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 $1530000. a-1 What is the NPV for the project if Yurdones required return is 11 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g. 32.16)) NPV $ a-2 If Yurdone requires a return of 11 percent on such undertakings should the firm accept or reject the project? Reject Accept b. The company is somewhat unsure about the assumption of a 4 percent growth rate in its cash flows. At what constant growth rate would the company just break even if it still required a return of 11 percent on investment? (Round your answer to 2 decimal places. (e.g. 32.16)) Constant growth rate % Show less
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constant growth rate would the company just break even if it still required a return of 11 percent on investment? was first posted on August 2, 2020 at 5:51 am.
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