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:

Opposite Truth Value

The truth value of a statement that is the direct negation of the original statement's truth value.

Disjunct

A component of a disjunction in logic, representing an alternative within a proposition, where if any disjunct is true, the entire statement is true.

Disjunction

The logical inclusionary operation indicating that if one or more of several propositions is true, the overall statement is true; emphasizes a different aspect of combining statements.

Biconditional

A logical statement where both parts imply each other; often phrased as "if and only if."