Juffair Properties (JP) is evaluating six real estate investments. Management plans to buy the properties today and sell them five years from today. The following table summarizes the initial cost and the expected sale price for each property, as well as the appropriate discount rate based on the risk of each venture.

JP has a total capital budget of $18,000,000 to invest in properties.

Q1. What is the IRR of each investment?

Q2. What is the NPV of each investment?

Q3. What is the Profitability Index (PI) of each investment?

Q4. Given its budget of $18,000,000, which properties should JP choose?
 

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Project Mountain Ridge Ocean Park Estates Lakeview Seabreeze Cost Today Discount Rate Expected Sale Price in Year 5 $ 3,000,000 15% $18,000,000 15,000,000 15% 75,500,000 9,000,000 15% 50,000,000 6,000,000 8% 35,500,000 Green Hills 3,000,000 8% 10,000,000 West Ranch 9,000,000 8% 46,500,000 Project Mountain Ridge Ocean Park Estates Lakeview Seabreeze Cost Today Discount Rate Expected Sale Price in Year 5 $ 3,000,000 15% $18,000,000 15,000,000 15% 75,500,000 9,000,000 15% 50,000,000 6,000,000 8% 35,500,000 Green Hills 3,000,000 8% 10,000,000 West Ranch 9,000,000 8% 46,500,000