$10-19$ ADJUSTING COST OF CAPITAL FOR RISK Ziege Systems is considering the following independent projects for the coming year:

$\backslash$table$[[$Project$,$Required Investment,Rate of Return,Risk$],[$A$,$$$4$ million,$14\mathrm{.}0\%,$High$],[$B$,5$ million,$11\mathrm{.}5,$High$],[$C$,3$ million,$9\mathrm{.}5,$Low$],[$D$,2$ million,$9\mathrm{.}0,$Average$],[$E$,6$ million,$12\mathrm{.}5,$High$],[$F$,5$ million,$12\mathrm{.}5,$Average$],[$G$,6$ million,$7\mathrm{.}0,$Low$],[$H$,3$ million,$11\mathrm{.}5,$Low$]]$

Ziege's WACC is $10\%,$ but it adjusts for risk by adding $2\%$ to the WACC for high$-$risk projects and subtracting $2\%$ for low$-$risk projects.

ing in Long$-$Term Assets: Capital Budgeting

a$.$ Which projects should Ziege accept if it faces no capital constraints?

b$.$ If Ziege can only invest a total of $$13$ million, which projects should it accept, and what would be the dollar size of its capital budget?

c$.$ Suppose Ziege can raise additional funds beyond the $$13$ million, but each new increment $($or partial increment$)$ of $$5$ million of new capital will cause the WACC to increase by $1\%.$ Assuming that Ziege uses the same method of risk adjustment, which projects should it now accept, and what would be the dollar size of its capital budget?