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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 is 14%. 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

$520,000

$1,020,000

Real Property Estates

990,000

1,590,000

Lost Lake Properties

510,000

910,000

Overlook

20,000

220,000

Kartman has a total capital budget of $540,000 to invest in properties. Which properties should it choose?

The profitability index for Parkside Acres is ? (Round to two decimal places)

The profitability index for real estates is? (Round to two decimal places)

The profitability for Lost Lake Properties is ? (Round to two decimal places)

The profitability index for overlook is ? (Round to two decimal places)

Which properties should Katman Corporation choose?

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