RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 2 3 4 Cash Flow - $50.0 $10.0 $20.0 $20.0 $15.0 (in millions) The firm believes that, given the risk of...


RiverRocks, Inc., is considering a project with the following projected free cash flows:<br>Year<br>2<br>3<br>4<br>Cash Flow<br>- $50.0<br>$10.0<br>$20.0<br>$20.0<br>$15.0<br>(in millions)<br>The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.0%. Should it take on this project? Why or why not?<br>The timeline for the project's cash flows is: (Select the best choice below.)<br>O A. Cash Flows (millions)<br>$50.0<br>- $10.0<br>- $20.0<br>- $20.0<br>- $15.0<br>Year<br>1<br>2<br>3<br>4<br>O B. Cash Flows (millions)<br>$50.0<br>- $10.0<br>$20.0<br>- $20.0<br>- $15.0<br>+<br>Year<br>1<br>2<br>3<br>4<br>O C. Cash Flows (millions) - $50.0<br>$10.0<br>$20.0<br>$20.0<br>$15.0<br>Year<br>2<br>3<br>4<br>O D. Cash Flows (millions)<br>$50.0<br>$10.0<br>$20.0<br>$20.0<br>$15.0<br>Year<br>1<br>2<br>3<br>4<br>The net present value of the project is S million. (Round to three decimal places.)<br>RiverRocks<br>V take on this project because the NPV is<br>(Select from the drop-down menus.)<br>

Extracted text: RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 2 3 4 Cash Flow - $50.0 $10.0 $20.0 $20.0 $15.0 (in millions) The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.0%. Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below.) O A. Cash Flows (millions) $50.0 - $10.0 - $20.0 - $20.0 - $15.0 Year 1 2 3 4 O B. Cash Flows (millions) $50.0 - $10.0 $20.0 - $20.0 - $15.0 + Year 1 2 3 4 O C. Cash Flows (millions) - $50.0 $10.0 $20.0 $20.0 $15.0 Year 2 3 4 O D. Cash Flows (millions) $50.0 $10.0 $20.0 $20.0 $15.0 Year 1 2 3 4 The net present value of the project is S million. (Round to three decimal places.) RiverRocks V take on this project because the NPV is (Select from the drop-down menus.)

Jun 04, 2022
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