Question
RiverRocks, Inc., is considering a project with the following projected free cashflows: YEAR 0 1 2 3 4 CASH FLOW (millions) - $50.2 $ 10.5
RiverRocks, Inc., is considering a project with the following projected free cashflows:
| YEAR | 0 | 1 | 2 | 3 | 4 |
| CASH FLOW (millions) | - $50.2 | $ 10.5 | $ 19.8 | $ 20.4 | $ 14.2 |
The firm believesthat, given the risk of thisproject, the WACC method is the appropriate approach to valuing the project.RiverRocks' WACC is 12.5%. Should it take on thisproject? Why or whynot?
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
4th Canadian edition
134724712, 134724713, 9780134779782 , 978-0134724713
