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Question 2: The Yan Corporation wants to set up a gardening business. According to the...

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Question 2: The Yan Corporation wants to set up a gardening business. According to the CFO, business is looking up." As a result, the project will provide a net cash inflow of $135,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 4.7 percent per year forever. The project requires an initial investment of $1,575,000. a. If shareholders require a return of 12 percent on such undertakings, should the business be started? 10 points b. The company is somewhat unsure about the assumption of a 4.7 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 12 percent on its investment? 10 points

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