Question: Marble Construction estimates that its WACC is 9% if equity comes from retained earnings. However, if the company issues new stock to raise new equity,

Marble Construction estimates that its WACC is 9% 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 9.7%. 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		$ 600,000	13.6	%
B		1,060,000	13.7
C		950,000	9.3
D		1,170,000	9.5
E		550,000	9.8
F		600,000	10.4
G		710,000	9.2

What is the firm's optimal capital budget? Round your answer to the nearest dollar.

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