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River Rocks, Inc. is considering a project with the following projected free cash flows: 1 2 3 Year Cash Flow in millions) - $50.3 $9.6

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River Rocks, Inc. is considering a project with the following projected free cash flows: 1 2 3 Year Cash Flow in millions) - $50.3 $9.6 $19.8 $19.2 $14.2 The firm believes that given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 11.7%. 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) $50.3 - $19.8 - $19.2 - $14.2 -$9.6 + 1 Year 2 3 4 OB. Cash Flows (millions) - $50.3 -$9.6 - $10.2 - $14.2 - $19.8 1 2 Year 0 1 O c. Cash Flows (millions) $50.3 $19.8 $19.2 $14.2 $9.6 11 1 Year 0 2 3 4 OD. Cash Flows (millions) -$50.3 $9.8 $19.8 $19.2 $14.2 Year 1 2 3 4

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