Question
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow (in millions) $50.1 $9.5
RiverRocks, Inc., is considering a project with the following projected free cash flows:
| Year | 0 | 1 | 2 | 3 | 4 |
| Cash Flow (in millions) | $50.1 | $9.5 | $20.2 | $19.3 | $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 11.9%.
Should it take on this project? Why or why not?
The net present value of the project is $_______ million.
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Personal Finance
Authors: Jeff Madura
4th Edition
0136117007, 9780136117001
