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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 16%. The following table summarizes the initial cost and the sale price in three years for each property: Sale Price in Year 3 Parkside Acres Cost Today $520,000 970,000 $1,020,000 Real Property Estates 1,570,000 Lost Lake Properties 510,000 910,000 Overlook 20,000 220,000 Kartman has total capital budget of $540,000 to invest in properties. Which properties should it choose
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