Assume that a firm has a number of positive NPV projects available but does not want to issue any new stock. The projected net income is $150 MM with a target capital structure of 25% debt and 75% equity. The target payout ratio is 65%. You are asked to determine the maximum capital budget given possible changes in capital structure and/or dividend payout policy. Versus the current policy, how much larger could the capital budget be if:

A. The target debt ratio were raised to 75% B.

The target payout ratio were lowered to 20%

C. Both A and B were changed, as indicated