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You are determining Magazines Unlimited optimal capital budget for next year The firm can raise up to $200000 of new capital at a cost of 14.2 above that it costs 15.4 You have identified the following possible indivisible independent projects with the same risk as the firm's existing assets:
Project cost IRR
A $100,000 18%
B 80,000 16%
C 50,000 15%
According to the (erroneous) "marginal project" argument:
a. the optimal capital budget consists of Projects A and B.
b. the optimal capital budget totals $200,000.
c. Project C should be included in the optimal capital budget.
d. the optimal capital budget totals $180,000.
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