Texas Transport has five possible investment projects for the coming year. Each project is indivisible. They are:
Project Investment (million IRR
A $ 6 18%
B $10 15%
C $9 20%
D $4 12%
E $3 24%
The firm's weighted marginal cost of capital schedule is 12 percent for up to $6 million of investment; 16 percent for between $6 million and $18 million of investment; and above $18 million the weighted cost of capital is 18 percent. The optimal capital budget is:
$12 million.
$18 million.
$23 million.
$28 million.