Durst Enterprises, Which Is Debt-Free and Finances Only with Equity

Durst Enterprises, which is debt-free and finances only with equity from retained earnings, is considering five large capital budgeting projects. Its CFO hired you to assist in deciding whether none, one, two, three, four, or five projects should be accepted. You have the following information: - r_RF = 4.00%; RP_M = 5.50%; and b = 1.00.
- The company adds 5%, 3%, 1%, 0%, or -1% to the corporate WACC when it evaluates projects that differ in risk.
- Project A is in the -1% category, B is in the 0% group, C is in the +1% group, D is in the +3% group, and E is in the most risky +5% group.
- Each project has a cost of $25,000.
- The projects' expected returns are as follows: A = 8.7%, B = 9.60%, C = 10.30%, D = 13.80%, and E = 14.70%. If these are the only projects under consideration, how large should Durst's capital budget be?

A) $100,000
B) $75,000
C) $50,000
D) $25,000