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ABC Real Estate Corporation is considering three investment alternatives for a new real estate development project in a growing urban area. The company is evaluating

ABC Real Estate Corporation is considering three investment alternatives for a new real estate development project in a growing urban area. The company is evaluating the construction of office buildings, residential apartments, and retail spaces. Each alternative requires an initial investment of $5 million. The cash flows for each alternative are as follows:
Office Buildings: Year 1: $800,000 Year 2: $1,200,000 Year 3: $1,500,000 Year 4: $1,800,000 Year 5: $2,000,000
Residential Apartments: Year 1: $600,000 Year 2: $1,000,000 Year 3: $1,300,000 Year 4: $1,600,000 Year 5: $2,200,000
Retail Spaces: Year 1: $700,000 Year 2: $1,100,000 Year 3: $1,400,000 Year 4: $1,900,000 Year 5: $2,100,000
The company's cost of capital is 10%.
Calculate the Net Present Value (NPV) for each investment alternative.
Construct the NPV profile for the three investment alternatives.
Analyze the NPV profile to determine the most financially attractive investment option for ABC Real Estate Corporation.

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