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The managers of Kenforest Grocers are trying to determine the company's optimal capital budget for the upcoming year. Kenforest is considering projects A, B, C,
The managers of Kenforest Grocers are trying to determine the company's optimal capital budget for the upcoming year. Kenforest is considering projects A, B, C, D, and E and has determined the marginal cost of capital schedule given below: Net Project Investment IRR A $200,000 13.9% B $300,000 14.2% C $300,000 13.8% D $100,000 15.5% E $150,000 13.0% Marginal Cost of Capital 0 - $500,000 12.8% Over $500,000 - $800,000 13.4% Over $800,000 - $1,000,000 13.8% Over $1,000,000 15% What is the firm's optimal capital budget? A. Accept all projects. B. Accept projects A, B, C, and D only. C. Accept projects A and B only. D. Accept projects B and D only. O E. Accept projects A, B, and D only
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