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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 15%. The following table summarizes the initial cost and the sale price in three years for each property: Parkside Acres Real Property Estates Lost Lake Properties Overlook Cost Today $570,000 970,000 560,000 70,000 Sale Price in Year 3 $1,070,000 1,570,000 960,000 270,000 Kartman has a total capital budget of $640,000 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 Property Estates is (Round to two decimal places.) The profitability index for Lost Lake Properties is (Round to two decimal places.) The profitability index for Overlook is (Round to two decimal places.) Which properties should Kartman Corporation choose? (Select the best choice below.) O A. Overlook and Parkside Acres OB. Overlook and Lost Lake Properties O C. Lost Lake Properties OD. Real Property Estates
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