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RiverRocks, Inc., is considering a project with the following projected free cash flows: Year Cash Flow (in millions) 0 1 2 3 4 -
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year Cash Flow (in millions) 0 1 2 3 4 - $49.6 $9.6 $19.4 $19.2 $15.6 The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.5%. Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below.) A. Cash Flows (millions) - $49.6 $9.6 $19.4 $19.2 $15.6 Year 0 2 3 4 B. Cash Flows (millions) - $49.6 - $9.6 - $19.4 - $19.2 - $15.6 Year 0 1 2 3 4 C. Cash Flows (millions) $49.6 $9.6 $19.4 $19.2 $15.6 + + Year 0 1 2 3 4 D. Cash Flows (millions) $49.6 - $9.6 - $19.4 - $19.2 -$15.6 + Year 0 1 2 3 4 The net present value of the project is $ million. (Round to three decimal places.) RiverRocks take on this project because the NPV is (Select from the drop-down menus.)
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