35. Kartman Corporation is evaluating four real estate investments. Management plans to buy the properties today and

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35. Kartman Corporation is evaluating four real estate investments. Management plans to buy the properties today and sell them three years from today. The annual discount rate for these investments is 15%. The following table summarizes the initial cost and the sale price in three years for each property: Cost Today Sale Price in Year 3 Parkside Acres $650,000 $1,150,000 Real Property Estates 800,000 1,400,000 Lost Lake Properties 650,000 1,050,000 Overlook 150,000 350,000 Kartman has a total capital budget of $800,000 to invest in properties. Which proper- ties should it choose?

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Fundamentals Of Corporate Finance

ISBN: 9781292018409

3rd Global Edition

Authors: Berk, Peter DeMarzo, Jarrad Harford

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