2. (25 points) Daves Chocolate Company currently has the following capital structure: Source % of Total Range After-Tax Cost Debt 35.00% Up to 500,000 4.50% 500,001 to 1,000,000 6.00% More than 1,000,000 8.00% Preferred Stock 8.00% Up to 330,000 6.50% More than 330,000 9.50% Common Equity 57.00% Up to 2,000,000 10.00% More than 2,000,000 13.00% Calculate each of the break-points, and create a chart of Daves Chocolate Company's marginal WACC curve. Make sure that it is a perfect step function, with each breakpoint labeled. 3. (10 points) You have 10 projects available with positive NPV, but you only have $5,000,000 for the upcoming year. Unfortunately, this amount is not sufficient to cover all of the positive NPV projects available to you. Now using the Solver to determine which of the following projects should be included in your budget if the firm's goal is to maximize shareholder wealth. Project Cost NPV $933,886 $88,839 599,597 61,635 543,024 55,164 903,203 88,810 177,955 26,388 760,785 67,033 708,061 18,377 240,736 60,126 888,564 63,725 995,952 50,307 Which projects should be accepted? B D E F G H I J 2. (25 points) Daves Chocolate Company currently has the following capital structure: Source % of Total Range After-Tax Cost Debt 35.00% Up to 500,000 4.50% 500,001 to 1,000,000 6.00% More than 1,000,000 8.00% Preferred Stock 8.00% Up to 330,000 6.50% More than 330,000 9.50% Common Equity 57.00% Up to 2,000,000 10.00% More than 2,000,000 13.00% Calculate each of the break-points, and create a chart of Daves Chocolate Company's marginal WACC curve. Make sure that it is a perfect step function, with each breakpoint labeled. 3. (10 points) You have 10 projects available with positive NPV, but you only have $5,000,000 for the upcoming year. Unfortunately, this amount is not sufficient to cover all of the positive NPV projects available to you. Now using the Solver to determine which of the following projects should be included in your budget if the firm's goal is to maximize shareholder wealth. Project Cost NPV $933,886 $88,839 599,597 61,635 543,024 55,164 903,203 88,810 177,955 26,388 760,785 67,033 708,061 18,377 240,736 60,126 888,564 63,725 995,952 50,307 Which projects should be accepted? B D E F G H I J