The firm shall accept all those projects whose IRR is greater than the WACC of 10.8%
So, the project's that shall be accepted will be:
A, B, C and D since the IRR of all of these project's is greater than the WACC of 10.8%
All projects other than the project A, B, C and D shall be rejected.
The firms optimal capital budget will be the sum of investment in these 4 projects i.e. Projects A, B, C and D
= $ 650,000 + $ 1,050,000 + $ 1,000,000 + $ 1,200,000
= $ 3,900,000
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