OPTIMAL CAPITAL BUDGET Marble Construction estimates that its WACC is 10% if equity comes from retained earnings. However, if the company issues new stock to raise new equity, it estimates that its WACC will rise to 10.8%. The company believes that it will exhaust its retained earnings at $2,500,000 of capital due to the number of highly profitable projects available to the firm and its limited earnings. The company is considering the following seven investment projects: Project Size IRR $650,000 1,050,000 1,000,000 1,200,000 500,000 650,000 700,000 14.0% 13.5 11.2 11.0 10.7 10.3 10.2 Assume that each of these projects is independent and that each is just as risky as the firm's existing assets. Which set of projects should be accepted? Project A Project B Project C Project D Project E Project F Project G What is the firm's optimal capital budget? Write out your answer completely. For example, 13 million should be entered as 13,000,000 Accept Accept Don't accept Don't accept Don't accept