onsider a project with normal cash flows. If the discount rate of the project (cost of capital) increases, then mum acceptable payback period. AIRR decreases while NPV increases B. IRR decreases while NPV remains constant. C. IRR does not change while NPV decreases. D. IRR does not change while NPV increases. E. None of the above statements is true. 9. You are given the following investment opportunity set and the Marginal Cost of Capital (MCC) schedule for a firm: Investment Opportunity Set: Project Investment ($) Rate of Return P $500.000 13.0% Q $500,000 12.5% R $800,000 11.3% S $800,000 10.2% The Marginal Cost of Capital (MCC) Schedule: First Breakpoint = $1,000,000 Second Breakpoint = $1,850,000 WACC1 = 10.0% (first interval) WACC2 = 11.5% (second interval) Which of the following statements is true? A. The firm should invest in all four projects, with an optimal capital budget of $2,600,000. B. The firm should invest in projects P, Q, and R only, with an OCB of $1,800,000. C. The firm should invest in projects P and Q only, with an optimal capital budget of $1,000,000 D. The firm should invest in project P only, with an optimal capital budget of $500,000. E. None of the above