Project A BCDEFG с Note: All projects have equal risk. |*|-| Project A C E Investment Required ($ Million) 500 100 50 125 300 150 250 Calculate the cumulative investment and complete Ajax's schedule of potential projects. (Hint: Ajax prioritizes projects according to their expected rates of return.) Expected Rate of Return (%) 23.0 18.0 100 21.0 16.0 300 14.0 13.0 19.0 Investment Required Expected Rate of Return ($ Million) (%) 500 23.0 50 21.0 18.0 14.0 Cumulative Investment ($ Million) 500 550 800 900 1,325 Ajax can raise funds with the following marginal costs. Calculate the cumulative funds raised to complete the following table. Block of Funds Cost of Capital ($ Million) (%) First 250 14.0 Cumulative Funds Raised ($ Million) 250

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The Ajax Corporation has the following set of projects available to it:
Project
A
G
F
BUDEF
Note: All projects have equal risk.
с
Project
A
с
B
G
Calculate the cumulative investment and complete Ajax's schedule of potential projects. (Hint: Ajax prioritizes projects according to their expected
rates of return.)
E
Investment Required Expected Rate of Return
($ Million)
(%)
500
23.0
100
50
125
300
150
250
Investment Required Expected Rate of Return
($ Million)
(%)
500
23.0
50
$550
$900
100
O $1,300
18.0
21.0
16.0
14.0
13.0
19.0
300
O $1,000
21.0
21.0
► ► ►
18.0
14.0
Ajax can raise funds with the following marginal costs. Calculate the cumulative funds raised to complete the following table.
Block of Funds Cost of Capital
($ Million)
(%)
First 250
14.0
Next 250
15.5
Next 100
16.0
Next 250
16.5
Next 200
18.0
Next 200
What is the optimal capital budget (in millions) for Ajax?
Cumulative Investment
($ Million)
500
550
800
1||
Cumulative Funds Raised
($ Million)
250
500
600
900
1,325
Transcribed Image Text:The Ajax Corporation has the following set of projects available to it: Project A G F BUDEF Note: All projects have equal risk. с Project A с B G Calculate the cumulative investment and complete Ajax's schedule of potential projects. (Hint: Ajax prioritizes projects according to their expected rates of return.) E Investment Required Expected Rate of Return ($ Million) (%) 500 23.0 100 50 125 300 150 250 Investment Required Expected Rate of Return ($ Million) (%) 500 23.0 50 $550 $900 100 O $1,300 18.0 21.0 16.0 14.0 13.0 19.0 300 O $1,000 21.0 21.0 ► ► ► 18.0 14.0 Ajax can raise funds with the following marginal costs. Calculate the cumulative funds raised to complete the following table. Block of Funds Cost of Capital ($ Million) (%) First 250 14.0 Next 250 15.5 Next 100 16.0 Next 250 16.5 Next 200 18.0 Next 200 What is the optimal capital budget (in millions) for Ajax? Cumulative Investment ($ Million) 500 550 800 1|| Cumulative Funds Raised ($ Million) 250 500 600 900 1,325
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