RiverRocks, Inc., is considering a project with the following projected free cash flows:

Year	0	1	2	3	4
Cash Flow (in millions)	$50.6	$10.9	$19.8	$19.4	$14.6

The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is

12.1%.

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.The timeline starts at Year 0 and ends at Year 4. It shows cash flows of -$ 50.6 in Year 0, -$ 10.9 in Year 1, -$ 19.8 in Year 2, -$ 19.4 in Year 3, and -$ 14.6 in Year 4. The cash flow amounts are in millions of dollars.

Cash Flows (millions)

$50.6

$10.9

$19.8

$19.4

$14.6

Year

0

1

2

3

4

B.The timeline starts at Year 0 and ends at Year 4. It shows cash flows of $ 50.6 in Year 0, -$ 10.9 in Year 1, -$ 19.8 in Year 2, -$ 19.4 in Year 3, and -$ 14.6 in Year 4. The cash flow amounts are in millions of dollars.

Cash Flows (millions)

$50.6

$10.9

$19.8

$19.4

$14.6

Year

0

1

2

3

4

C.The timeline starts at Year 0 and ends at Year 4. It shows cash flows of negative $ 50.6 in Year 0, $ 10.9 in Year 1, $ 19.8 in Year 2, $ 19.4 in Year 3, and $ 14.6 in Year 4. The cash flow amounts are in millions of dollars.

Cash Flows (millions)

$50.6

$10.9

$19.8

$19.4

$14.6

Year

0

1

2

3

4

Your answer is correct.

D.The timeline starts at Year 0 and ends at Year 4. It shows cash flows of $ 50.6 in Year 0, $ 10.9 in Year 1, $ 19.8 in Year 2, $ 19.4 in Year 3, and $ 14.6 in Year 4. The cash flow amounts are in millions of dollars.

Cash Flows (millions)

$50.6

$10.9

$19.8

$19.4

$14.6

Year

0

1

2

3

4

The net present value of the project is

$nothing

million.