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 \( \$ 310,000 \) while SO Interiors had a net income of \( \$ 200,000 \). Both companies built a business plan for future growth beyond the third year. Portrait Inc projected an increase in net income of \( \$ 25,500 \) per year, while SO Interiors' plan aimed to increase its net income by \( 16 \% \) 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 Keypad Keyboard Shortcuts 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.

To determine which company is a better investment based on their net income growth projections, let's analyze both options: 1. **Portrait Inc:** - **Year 3 Net Income:** \$310,000 - **Annual Growth:** \$25,500 (linear growth) 2. **SO Interiors:** - **Year 3 Net Income:** \$200,000 - **Annual Growth:** 16% (exponential growth) **Crossover Point:** - The two companies' net incomes intersect at approximately **5.4 years**. Before this point, **Portrait Inc** has a higher net income due to its linear growth. After 5.4 years, **SO Interiors**' exponential growth allows it to surpass **Portrait Inc** in net income. **Investment Implications:** - **Investing for Less Than 5.4 Years:** - **Portrait Inc** offers a quicker return on investment because its net income is higher in the short term. - **Investing for More Than 5.4 Years:** - **SO Interiors** becomes the better investment as its net income growth outpaces **Portrait Inc** over the long term. **Selected Answers:** - **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. - **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. **Therefore, the correct selections are:** - 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. - 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.