Dreebyshaw Industries must set its investment and dividend policies for the coming year. It has three independent projects from which to choose, each of which requires a $6 million investment. These projects have different levels of risk, and therefore different costs of capital. Their projected IRRs and costs of capital are as follows:

Project A:	Cost of capital =	18%;		IRR =	19%
Project B:	Cost of capital =	12%;		IRR =	11%
Project C:	Cost of capital =	6%;		IRR =	10%

Dreebyshaw intends to maintain its 45% debt and 55% common equity capital structure, and its net income is expected to be $15,000,000. If Dreebyshaw maintains its residual dividend policy