Jose Salazar is considering investing in a commercial property in Kelowna, BC. The property will cost $2,000,000, including legal fees, and is expected to generate net annual cash flows of $200,000. Due to changing consumer trends, Jose feels that in four years he will need to invest $80,000 to install four electric car charging stations. Jose plans to own the property for 10 years, at which time he believes that he will be able to sell it for $1,800,000. Ignore the cash flow consequences of depreciation and assume that lose uses an 8% discount rate on all his capital budgeting decisions REQUIRED Part As Calculate the net present value of the proposed purchase Should lose purchase the property? Show your work and answer the question for full marks (9 marks) Part B) Calculate the profitability Index of the purchase of the property. Assume that Jose can instead elect to purchase a motel for $7,500,000 which will generate positive cash inflows of $8,900,000. If lose can only purchase one of the two properties, the commercial property or the motel, which investment should lose make and why? (4 marks) Jose Salazar is considering investing in a commercial property in Kelowna, BC. The property will cost $2.000.000, including legal fees, and is expected to generate net annual cash flows of $200,000. Due to changing consumer trends, lose feels that in four years he will need to invest $80,000 to install four electric car charging stations. Jose plans to own the property for 10 years, at which time he believes that he will be able to sell it for $1,800,000. Ignore the cash flow consequences of depreciation and assume that Jose uses an 8% discount rate on all his capital budgeting decisions REQUIRED Part A) Calculate the net present value of the proposed purchase. Should lose purchase the property? Show your work and answer the question for full marks.(9 marks) Part B) Calculate the profitability index of the purchase of the property. Assume that lose can instead elect to purchase a motel for $7,500,000 which will generate positive cash inflows of $8,900,000. If Jose can only purchase one of the two properties, the commercial property or the motel, which investment should Jose make and why? (4 marks) A 3