Question: Marble Construction estimates that its WACC is 1 2 % if equity comes from retained earnings. However, if the company issues new stock to raise

Marble Construction estimates that its WACC is 12% if equity comes from retained earnings. However, if the company issues new stock to raise new equity, it estimates that its WACC will rise to 12.6%. The company believes that it will exhaust its retained earnings at $2,400,000 of capital due to the number of highly profitable projects available to the firm and its limited earnings. The company is considering the following seven investment projects:
Project Size IRR
A $ 680,00013.9%
B 1,080,00013.3
C 1,040,00012.9
D 1,160,00012.4
E 460,00012.5
F 680,00012.1
G 700,00013.3
Assume that each of these projects is independent and that each is just as risky as the firm's existing assets. Which set of projects should be accepted?
Project A
accept
Project B
accept
Project C
accept
Project D
don't accept
Project E
don't accept
Project F
don't accept
Project G
accept
What is the firm's optimal capital budget? Round your answer to the nearest dollar.
$

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