A Venture Will Provide a Net Cash Inflow of $57,000

Multiple Choice

A venture will provide a net cash inflow of $57,000 in Year 1. The annual cash flows are projected to grow at a rate of 7 percent per year forever. The project requires an initial investment of $739,000 and has a required return of 15.6 percent. The company is somewhat unsure about the growth rate assumption. At what constant rate of growth would the company just break even?

A) 9.48 percent
B) 9.29 percent
C) 7.89 percent
D) 8.49 percent
E) 7.75 percent