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River Rocks, Inc., is considering a project with the following projected free cash flows: 0 1 2 3 4 Year Cash Flow (in millions) -

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River Rocks, Inc., is considering a project with the following projected free cash flows: 0 1 2 3 4 Year Cash Flow (in millions) - $49.7 $9.7 $19.9 $20.6 $14.1 The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.7%. 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) $49.7 -$9.7 - $19.9 - $20.6 - $14.1 Year 0 1 2 3 4 B. Cash Flows (millions) - $49.7 - $9.7 - $19.9 - $20.6 - $14.1 Year 0 N 3 $14.1 O C. Cash Flows (millions) - $49.7 H Year 0 $9.7 + 1 $19.9 + 2 $20.6 + 3 4 O D. Cash Flows (millions) $49.7 $9.7 $19.9 $20.6 $14.1 Year 0 1 N 3 4

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