RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 2 3 4 Cash Flow - $49.7 $10.2 $19.6 $19.6 $15.1 (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 12.4%. 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) -S49.7 - $19.6 + - $10.2 - $19.6 + - $15.1 + Year 1 3 4 O B. Cash Flows (millions) $49.7 $10.2 $19.6 $19.6 $15.1 Year 1 2 3 OC. Cash Flows (millions) -S49.7 $10.2 $19.6 $19.6 $15.1 Year 1 2 3 4. O D. Cash Flows (millions) $49.7 -%2410.2 - $19.6 - $19.6 -$15.1 Year 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 )
RiverRocks, Inc., is considering a project with the following projected free cash flows: Year 2 3 4 Cash Flow - $49.7 $10.2 $19.6 $19.6 $15.1 (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 12.4%. 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) -S49.7 - $19.6 + - $10.2 - $19.6 + - $15.1 + Year 1 3 4 O B. Cash Flows (millions) $49.7 $10.2 $19.6 $19.6 $15.1 Year 1 2 3 OC. Cash Flows (millions) -S49.7 $10.2 $19.6 $19.6 $15.1 Year 1 2 3 4. O D. Cash Flows (millions) $49.7 -%2410.2 - $19.6 - $19.6 -$15.1 Year 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 )
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 9P
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