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Ziege Systems is considering the following independent projects for the coming year: Project Required Investment Rate of Return Risk A $4 million 11.50% High B

Ziege Systems is considering the following independent projects for the coming year:

Project Required Investment Rate of Return Risk
A $4 million 11.50% High
B 5 million 14.00 High
C 3 million 9.50 Low
D 2 million 9.25 Average
E 6 million 12.50 High
F 5 million 12.50 Average
G 6 million 7.25 Low
H 3 million 11.50 Low

A) Ziege's WACC is 10.00%, but it adjusts for risk by adding 2% to the WACC for high-risk projects and subtracting 2% for low-risk projects. If Ziege can only invest a total of $13 million, what would be the dollar size of its capital budget? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places.

B) Suppose Ziege can raise additional funds beyond the $13 million, but each new increment (or partial increment) of $5 million of new capital will cause the WACC to increase by 1%. What would be the dollar size of its capital budget? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places.

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