tough problem need help!!

s Question Completion Status: s, it is a bit want to take a look at Figure 12.4 on page 486. I do not expect you to send me a graph, but you might find figure 12.4 helpful in figuring out what you need to know P-S The Acme Cip Manufacturing Company potato not computer) has a target capital structure of 40% debt and 60% common equity. They also have a 40% tax rate. They have three projects under consideration code named: Manny, Moe, and Jack. All are independent. The IRRs for the three projects Manny 16% ??? 13% Jack 10% All three projects have an initial investment of $1,000,000. Acme can borrrow up to S 2,000,000 from the bank at a quoted interest rate of 8%. They also have a reported $3,000,000 in Retained Earnings available for new projects Additional information: The next common stock dividend they pay will be $4.00 per share. They also expect a growth rate of 5% on common equity. New common stock can be sold for $50.00 per share, with flotation costs of $10.00 per share. a. Which projects would you accept and why? Yes, I need to see some "number crunching b. What would be your capital budget? Part 2: Let's change one thing. The federal government has decided to increase the regulations affecting the manufacturing of chips. Complying with these new regulations will cost Acme 53 million, wiping out their retained earnings. So now a. Which projects would you accept and why? More number crunching pleasel b. What would be their capital budget now? 29