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 earrings 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 IRR Size A $650,000 14.0% B 1,050,000 13.5 1,000,000 11.2 D 1,200,000 11.0 E 500,000 10.7 F 650,000 10.3 G 700,000 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 V Selech Project B Accept Don't accept Project Project Select Project E -Select Project F -Select Project G Select What is the firm's optimal capital budget? Write out your answer completely. For example, 13 million should be entered as 13,000,000 V V