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Kartman Corporation is evaluating four different real estate investments. Management plans to buy the properties today and sell them three years from today. The annual

Kartman Corporation is evaluating four different real estate investments. Management plans to buy the properties today and sell them three years from today. The annual discount rate for these investments is11%. 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

$510,000

$1,010,000

Real Property Estates

990,000

1,590,000

Lost Lake Properties

500,000

900,000

Overlook

10,000

210,000

Kartman has a total capital budget of$520,000 to invest in properties. Which properties should it choose?

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