a. What is the optimal Capital Budget? b. Which projects should be accepted and which ones should be rejected? Explain Answer: Project Cost MIRR WACC Cumulative Decision cost C 800 16.50% 11.86% 800 Accept E 750 15.75% 11.86% 1550 Accept D 550 14.57% 11.86% 2100 Accept A 600 14.00% 11.86% 2700 Accept B 800 13.00% 13.07% 3500 Reject F 400 12.00% 13.07% 3900 Reject Accept project C E DA and reject B, F. When the MIRR of the project is above WACC, we accept the project because returns will outweigh the costs and the company will gain profits.