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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
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: Parkside Acres Real Property Estates Lost Lake Properties Overlook Cost Today $530,000 930,000 520,000 30,000 Kartman has a total capital budget of $560,000 to invest in properties. Which properties should it choose? The profitability index for Parkside Acres is The profitability index for Real Property Estates is (Round to two decimal places.) (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.) Sale Price in Year 3 $1,030,000 1,530,000 920,000 230,000
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