Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. The money supply M is 2,000, and the price level P is 2. If the price level is fixed and the supply of money is raised to 2,800, then the equilibrium interest rate will:
A. drop by 4 percent
B. drop by 2 percent
C. drop by 1 percent
D. remain unchanged

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?