Mary Basert, Inc., a national advertising firm, is analyzing the following investment opportunities.

The information needed to calculate the firms weighted marginal cost of capital curve is presented below. Construct Basetts weighted marginal cost of capital curve and which investments should be accepted.

Investinent A B MOA Investinent Cost $50,000 $200,000 $325,000 $125,000 $400,000 $75,000 Internal Rate of Return 14.5% 17.9% 15.6% 12.4% 10.9% 13.8% D E F Source Debt Percentage 40% Preferred stock 8% Amount of Capital $0 - 300,000 Over $300,000 $0 - 50,000 $50,001 - 100.000 Over $100,000 $0 - 520,000 Over $520,000 After-tax Cost 4.5% 6.0% 9.5% 10.5% 11.0% 16% 18% Common stock 52% Investinent A B MOA Investinent Cost $50,000 $200,000 $325,000 $125,000 $400,000 $75,000 Internal Rate of Return 14.5% 17.9% 15.6% 12.4% 10.9% 13.8% D E F Source Debt Percentage 40% Preferred stock 8% Amount of Capital $0 - 300,000 Over $300,000 $0 - 50,000 $50,001 - 100.000 Over $100,000 $0 - 520,000 Over $520,000 After-tax Cost 4.5% 6.0% 9.5% 10.5% 11.0% 16% 18% Common stock 52%