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Ziege Systems is considering the following independent projects for the coming year: Ziege's WACC is 10.75%, but it adjusts for risk by adding 2% to
Ziege Systems is considering the following independent projects for the coming year: Ziege's WACC is 10.75%, but it adjusts for risk by adding 2% to the WACC for high-risk projects and subtracting 2% for low-risk projects. a. Which projects should Ziege accept if it faces no capital constraints? b. If ziege can only invest a total of $13 million, which projects should it accept? If 2iege can only invest a total of 313 miliion, 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. 3 c. 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%. Assuming that Zlege uses the same method of risk adjustment, which projects should it now accept? What would be the dollar size of its capital budget? Enter your answer in milions. For example, an answer of $10,550,000 should be entered a5 10.55. Round your answer to two decimal places. 5 miltion
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