Best Properties $($BP$)$ is evaluating six real estate investments. Management plans to buy the

properties today and sell them five years from today. $($Each investment is expected to generate a

single future cash flow, the sale price at $t=5.)$ The following table summarizes the initial cost

and the expected sale price for each property, as well as the appropriate discount rate based on

the risk of each venture.

BP has a total capital budget of $$18,000,000$ to invest in properties.

a$.$ What is the IRR of each investment?

b$.$ What is the NPV of each investment?

c$.$ Which properties should BP choose based on the Profitability Index rule?

d$.$ Does the Profitability Index rule give the correct decision in this case?

For parts e and $f,$ assume instead that BP has a total capital budget of $$12,000,000$ to invest in

properties.

e$.$ Explain why the profitability index method can't be used in this case.

f$.$ Which properties should BP choose based on the NPV rule?