It's budget time again and the various division managers have brought their proposals for next year's capital spending program. Your job is to evaluate these proposals from a financial pective and determine which projects meet the company's criteria for investment. Additional information: Based on your findings and suggestions regarding management of the company's weighted average cost of capital, the company has decided to increase slightly it's use of (less expensive) debt financing. The result is that the company's new WACC is now approximately 10%. However, you feel that the various divisions have different risk profiles, given their dependencies are very different industries. The window film business depends on both the commercial and residential construction industries, as well as the home improvement market; the vehicle film business depends on the automobile industry, the roof film business depends on the residential construction industry, but also on the energy (utilities) industry, as some some of the major projects for this division involve joint ventures with local and regional utilities companies and the aerospace film business depends on the ups and downs of the aerospace industry and the political influences that affect NASA's budgets and projects. These dependencies can cause the revenues (and profitability) for these divisions to fluctuate significantly over time, so you propose to use different discount values for evaluating the various divisional projects The construction industries (both residencial and commercial) have now recovered from the recession back in 2008-2009, so you feel comfortable applying a discount rate to the window film division of 10%, which is equal to the company's WACC. The automobile industry, though fairly robust, is still volatile. The level of vehicle sales has been fluctuating from year to year and this affects the vehicle film division's sales, so you feel obliged to add a few percentage points to this division's discount rate, to factor in this risk. The vehicle film division will use a 12% discount rate. The roof film division will utilize an 1 1% discount rate as it has a slightly higher risk than the window film business...due to the dependency on the utility companies, and their somewhat fickle support for renewable energy projects. The aerospace business is perhaps the most risky due to the political nature of NASA budgets and the wild swings in that industry The aerospace division will use a discount rate of 15% (which includes a 5% risk adjustment over the company's WACC)