Problem $1$

Ziege Systems is considering the following independent projects for the next year.

The company estimates that its WACC is currently $10\%.$ The company adjusts for risk by adding $2\%$ for WACC

for high$-$risk projects and subtracting $2\%$ from the WACC $($discount rate$)$ for low$-$risk projects.

a$.$ Which projects should Ziege accept if it faces no capital constraints $?$

b$.$ If Ziege only has the ability to invest a total of $$13$ million, which projects should it accept?