Question
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 0 1 2 3 4 Cash Flow (In Millions) -$49.4 $9.8
RiverRocks, Inc., is considering a project with the following projected free cash flows:
| Year | 0 | 1 | 2 | 3 | 4 |
| Cash Flow (In Millions) | -$49.4 | $9.8 | $19.5 | $20.1 | 15.5 |
The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.7 %. Should it take on this project? Why or why not?
The net present value of the project is $_____million.(Round to three decimal places.)
(Select the best answer from the drop-down menu)
RiverRocks (SHOULD/SHOULD NOT) not take on this project because the NPV is (NEGATIVE/POSITIVE)
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Financial Management Principles And Practice
Authors: Timothy Gallagher
6th Edition
1930789157, 978-1930789159
