Benchmark Inc. is an all-equity financed firm with a cost of capital of 8%. The firm has four investment projects available with returns depending on the state of the economy. Relevant information on each of the projects is summarized below. State Probability Project A Project B Project C Project D 1 0.25 0.10 0.12 0.13 0.24 2 0.25 0.08 0.10 0.11 0.17 3 0.25 0.07 0.09 0.06 0.07 4 0.25 -0.03 0.07 0.04 0.05 Beta 0.40 0.60 0.80 1.50 The risk free rate is 4% and the market risk premium is 6%. If the firm has sufficient capital to invest and the projects are not mutually exclusive, which of these projects should the firm undertake? Which projects would you pick based on the company cost of capital? Motivate your answers and show your calculations.