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 | $19.1 | $20.5 | $14.5 |
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?
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Capital Markets Institutions Instruments And Risk Management
Authors: Frank J. Fabozzi
5th Edition
0262029480, 9780262029483
