Question
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow (in millions) $50.6 $9.6
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 | $9.6 | $19.3 | $19.6 | $15.7 |
The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 11.2%.
Should it take on this project? Why or why not?
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The net present value of the project is $ million. (Round to three decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started