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RiverRocks, Inc., is considering a project with the following projected free cash flows: Year Cash Flow (in millions) The firm believes that, given the risk
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year Cash Flow (in millions) The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.6%. Should it take on this project? Why or why not? Year B. Cash Flows (millions) $50.1 0 The timeline for the project's cash flows is: (Select the best choice below.) A. Cash Flows (millions) $50.1 - $20.7 + 2 $20.7 0 - $50.1 Year 0 OC. Cash Flows (millions) - $50.1 Year Year 0 O D. Cash Flows (millions) - $50.1 0 - $10.1 1 $10.1 1 $10.1 1 -$10.1 1 $10.1 1 2 $20.7 + 2 2 $20.7 - $20.7 + 2 - $19.5 + 3 $19.5 + 3 $19.5 1 3 - $19.5 + 3 3 $19.5 The net present value of the project is $ million. (Round to three decimal places.) RiverRocks take on this project because the NPV is - $14.4 4 $14.4 4 $14.4 4 - $14.4 4 4 $14.4 (Select from the drop-down menus.)
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