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River Rocks, Inc., is considering a project with the following projected free cash flows: 0 1 2 3 4 Year Cash Flow (in millions) -

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River Rocks, Inc., is considering a project with the following projected free cash flows: 0 1 2 3 4 Year Cash Flow (in millions) - $49.7 $10.2 $20.6 $19.9 $14.3 The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.8%. Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below.) A. Cash Flows (millions) - $49.7 - $14.3 - $10.2 + 1 - $20.6 + 2 - $19.9 + 3 Year 0 B. Cash Flows (millions) - $49.7 $14.3 $10.2 + 1 $20.6 + 2 $19.9 + 3 Year 0 4 O C. Cash Flows (millions) $49.7 $20.6 $19.9 $14.3 $10.2 + 1 Year 0 2 3 4 D. Cash Flows (millions) $49.7 - $10.2 - $19.9 - $14.3 - $20.6 + Year 0 1 3

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