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River Rocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow - $49.9 $9.2

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River Rocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow - $49.9 $9.2 $19.4 $20.3 $14.8 (in millions) 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 11.6%. Should it take on this project? Why or why not? A. Cash Flows (millions) - $49.9 $9.2 $19.4 $20.3 $14.8 Year 0 1 2 3 4 $9.2 $20.3 $14.8 O B. Cash Flows (millions) $49.9 F Year 0 $19.4 + 2. 1 2 3 4 O C. Cash Flows (millions) $49.9 - $9.2 - $20.3 - $14.8 - $19.4 + Year 0 1 2 3 4 N D. Cash Flows (millions) - $49.9 - $9.2 - $19.4 - $20.3 - $14.8 Year 0 1 2. 3 4 The net present value of the project is $ million (Round to three decimal places.)

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