The Chandler Group Wants to Set Up a Private Cemetery

question 95

Multiple Choice

The Chandler Group 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 $57,000 for the firm during the first year,and the cash flows are projected to grow at a rate of 7 percent per year forever.The project requires an initial investment of $759,000.The firm requires a 14 percent return on such undertakings.The company is somewhat unsure about the assumption of a 7 percent growth rate in its cash flows.At what constant rate of growth would the company just break even?

• A)4.48 percent
• B)5.29 percent
• C)5.61 percent
• D)6.49 percent
• E)6.75 percent

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Definitions:

Mechanoreceptors

Sensory receptors that respond to mechanical pressure or distortion, involved in detecting touch, pressure, and sound.

Cutaneous Receptors

Sensory receptors located in the skin that respond to touch, pressure, temperature, and pain.

Meissner Corpuscles

Touch receptors located in the upper dermis, primarily responsible for sensitivity to light touch.

Pacinian Corpuscles

Sensory receptors in the skin sensitive to pressure and vibration, helping organisms perceive touch and pressure changes.