Please explain how they got the solution in the first question. Thanks.

RST has an optimal capital structure of 45% debt and 55% equity. For the year, the EBIT has a balance of P2,000,000 , 75% ofwhich are allotted for the ordinary equity shareholders. The company's cost of capital is 15%. It has also the following prospective investments Project Proposal Expected investment P 1,200,000 P 500,000 P 350,000 P 450,000 Expected IRR(%) 20% 18% 13% 1696 What projects will constitute the firm's optimal capital budget? If dividends are treated as residual, how much dividends should be paid out to shareholders? Solutions: The projects that will constitute the optimal capital budget are Projects 1,2 and 4 since they IRR is greater than the cost of capital of 15%. These projects need capital requirement of P 2,150,000. P 1,182,500 of this capital requirement will come from equity. The amount of dividends that should be paid out to equity shareholders is P 317,500 [(P2,000,000 x 75%)-P1,182.500]