Question
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow (in millions) -$50.9 $9.4
RiverRocks, Inc., is considering a project with the following projected free cash flows:
Year 0 1 2 3 4
Cash Flow (in millions) -$50.9 $9.4 $20.5 $19.1 $15.8
The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 11.6%. Should it take on this project? Why or why not?
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Financial Reporting and Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
7th edition
1259722651, 978-1259722653
