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RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow (in millions) $50.5 $10.5

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

Year

0

1

2

3

4

Cash Flow

(in millions)

$50.5

$10.5

$19.1

$19.5

$14.9

The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 11.4%.

Should it take on this project? Why or why not?

2. The net present value of the project is $______ million.(Round to three decimal places.)

3. RiverRocks (should or should not) take on this project because the NPV is (positive or negative).

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