Senyum Selalu Corporation has to decide on which of the following projects should be selected. Below is part of the relevant information obtained from the company.

Project	Rate of Return (%)	Project Cost (RM)
Abiad	15	180,000
Bastina	18	320,000
Choline	12	440,000
Damia	20	250,000
Everton	10	100,000

The firms capital structure consists of RM1.4 million debt, RM800,000 in preferred stock and RM1.8 million in common equity. The capital mix is to be maintained for future investments. Before tax cost of debt is 12 percent for the first RM175,000 and thereafter the before tax cost will be 15 percent.

The after tax cost of preferred stock is 11.67 percent for the first RM120,000 and above that will be 12.68 percent

The common equity portion of the investment will be finance first by internally generated earnings of RM450,000. If additional common stock financing is needed, new shares can be issued at a price of RM30 minus floatation cost of RM5 per share. The last dividend paid to the shareholders for each share is RM2.8 and it should grow at an annual rate of 10 percent. The firms marginal tax rate is 30 percent.

1. Construct weighted marginal cost of capital (WMCC) and investment opportunity schedule curve (IOS)
2. Which investment should Senyum Selalu Corporation accept? Justify your answer