Kaimalino Properties(KP) is evaluating six real estate investments. Management plans to buy the properties today and sell them five years from today. The following table summarizes the initial cost and the expected sale price for eachproperty, as well as the appropriate discount rate based on the risk of each venture.

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

a.What is the IRR of eachinvestment?

b.What is the NPV of eachinvestment?

c.Given its budget of$18,000,000, which properties should KPchoose?

d.Explain why the profitability index method could not be used ifKP's budget were $

Project Mountain Ridge Ocean Park Estates Lakeview Seabreeze Green Hills West Ranch Cost Today $3,000,000 15,000,000 9,000,000 6,000,000 3,000,000 9,000,000 (\"M 15 15 15 Pri'ce in Year 5 $18,000,000 75,500,000 50,000,000 35,500,000 10,000,000 46,500,000