Major corp. is considering the purchase of a new machine for $5,000 that will have an estimated useful life of 5 years and no salvage value. the machine will increase major’s after-tax cash flow by $2,000 annually for 5 years. major uses the straight-line method of depreciation and has an incremental borrowing rate of 10%. the present value factors for 10% are as follows: using the payback method, how many years will it take to pay back major’s initial investment in the machine?

Miami incorporated estimates that its retained earnings break point (bpre) is $21 million, and its wacc is 13.40 percent if common equity comes from retained earnings. however, if the company issues new stock to raise new common equity, it estimates that its wacc will rise to 13.88 percent. the company is considering the following investment projects: project size irr a $4 million 14.00% b 5 million 15.10 c 4 million 16.20 d 6 million 14.20 e 1 million 13.42 f 6 million 13.75 what is the firm's optimal capital budget?