RiverRocks, Inc., is considering a project with the following projected free cash flows:YearCash Flow(in millions)0-$50.81234$10.8$19.5$19.3$14.2The firm believes that, given the risk of this project, the WACC method is the appropriate approach to valuing the project. RiverRocks' WACC is 12.5%. Should it take on this project? Whywhy not?The timeline for the project's cash flows is: (Select the best choice below.)OA. Cash Flows (millions)$50.8-$10.8- $19.5- $19.3- $14.2Year01234B. Cash Flows (millions)-$50.8$10.8$19.5$19.3$14.2Year01234OC. Cash Flows (millions)$50.8$10.8$19.5$19.3$14.2Year01234OD. Cash Flows (millions) - $50.8- $10.8- $19.5- $19.3- $14.2Year01234The net present value of the project is $million. (Round to three decimal places.)

Answered: RiverRocks, Inc., is considering a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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