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Let’s compare two relatively new companies who began operations at the same time, Portrait Inc and SO Interiors. In their third year of business, Portrait Inc had a net income of while SO Interiors had a net income of . Both companies built a business plan for future growth beyond the third year. Portrait Inc projected an increase in net income of per year, while SO Interiors’ plan aimed to increase its net income by each year.
Step 4 of 5: If both companies were able to meet their net income growth goals, which company would you choose to invest in? Why? Select all answers that apply.
Answer 2 Points
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SO Interiors: If you are able to invest money for less than 5.4 years, then you will get a quick return on your investment.
Portrait Inc: If you are able to invest money for less than 5.4 years, then you will get a quick return on your investment.
Portrait Inc: If you are able to invest money for more than 5.4 years, then their income will continue to grow at a faster rate.
SO Interiors: If you are able to invest money for more than 5.4 years, then their income will continue to grow at a faster rate.

Ask by Donnelly Floyd. in the United States
Jan 23,2025

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If you invest for less than 5.4 years, Portrait Inc offers a quicker return. If you invest for more than 5.4 years, SO Interiors will have higher net income growth.

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Beyond the Answer

Investing in Portrait Inc could be a solid choice if you’re considering a longer investment horizon. Starting with a higher net income and projecting a steady increase of each year allows for a solid, predictable profit growth that can yield impressive returns over time. This consistency may appeal more to risk-averse investors looking for stability.
On the other hand, SO Interiors showcases a dynamic growth plan with a projected annual increase of . This means their income grows exponentially, which can lead to higher returns in the long term, especially beyond the 5.4-year mark. If you’re willing to embrace a bit more risk for potentially greater rewards, this company could be a compelling option!

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