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please answer all parts, they go together RiverRocks, Inc., is considering a project with the following projected free cash flows: The firm believes that, given
please answer all parts, they go together
RiverRocks, Inc., is considering a project with the following projected free cash flows: The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 11.1%. Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below.) A. Cash Flows (millions) Year B. Cash Flows (millions) Year C. Cash Flows (millions) Year D. Cash Flows (millions) Year The net present value of the project is $ million. (Round to three decimal places.) RiverRocks take on this project because the NPV is (Select from the drop-down menus.) RiverRocks realizes that it will have to raise the financing for the acquisition of Raft Adventures by issuing new debt and equity. The acquisition project has a net present value of $36.66 million. The firm estimates that the direct issuing costs will come to $6.52 million. How should it account for these costs in evaluating the project? Should RiverRocks proceed with the project? RiverRocks, whose WACC is 11.4%, is considering an acquisition of Raft Adventures (whose WACC is 15.4% ). The purchase will cost $103.5 million and will generate cash flows that start at $15.5 million in one year and then grow at 4.4% per year forever. What is the NPV of the acquisition? The net present value of the project is million. (Round to two decimal places.)Step by Step Solution
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