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4 River Rocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 Cash Flow - $50.7 $10.3

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4 River Rocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 Cash Flow - $50.7 $10.3 (in millions) $19.1 $19.4 $15.9 The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. River Rocks' WACC is 12.2%. Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below.) O A. Cash Flows (millions) $50.7 - $15.9 -$10.3 + 1, -$19.1 + 2 - $19.4 + 3 Year 0 4 OB. Cash Flows (millions) - $50.7 - $10.3 - $15.9 + 1 - $19.1 + 2 -$19.4 + 3 Year 0 4 O C. Cash Flows (millions) $50.7 $19.4 $15.9 $10.3 + 1 $19.1 + 2 2 0 0 3 4 Year O D. Cash Flows (millions) - $50.7 $10.3 $19.4 $ $15.9 $19.1 1 2 Year 0 1 1 3 3 4

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