Question
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow (in millions) $49.7 $9.8
RiverRocks, Inc., is considering a project with the following projected free cash flows:
| Year | 0 | 1 | 2 | 3 | 4 |
| Cash Flow (in millions) | $49.7 | $9.8 | $19.7 | $19.8 | $14.2 |
The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is
11.3%.
Should it take on this project? Why or why not?
The net present value of the project is $____million.(Round to three decimal places.)
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Financial Accounting The Impact On Decision Makers
Authors: Gary A Porter, Curtis L Norton
7th Edition
1439080526, 9781439080528
