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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 - $50.6 $10.3

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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 - $50.6 $10.3 $20.3 $20.4 $15.2 (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 12.1%. Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below.) O A. Cash Flows (millions) $50.6 - $10.3 - $20.3 - $20.4 - $15.2 Year 0 1 2 3 B. Cash Flows (millions) - $50.6 $15.2 $10.3 + 1 $20.3 + 2 $20.4 + 3 Year 0 4 C. Cash Flows (millions) $50.6 $15.2 $10.3 + 1 $20.3 1 $20.4 + 3 Year 0 N O D. Cash Flows (millions) - $50.6 - $10.3 - $20.3 - $20.4 - $15.2 Year 1 2 3 The net present value of the project is $ - 1.151 million. (Round to three decimal places.) River Rocks should not take on this project because the NPV is negative . (Select from the drop-down menus.)

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