Question 12 of 25 Step 4 of 5 No пime Limit Let's compare two relatively new companies who began operations at the same time, Portrait inc and 50 Interiors. In their third year of business, Portrait inc had a net income of \( \$ 325,000 \) while SO Interiors had a net income of \( \$ 215,000 \). Both companies built a business plan for future growth beyond the third year. Portrait Inc projected an increase in net income of \( \$ 27,000 \) per year, while SO interiors' plan aimed to increase its net income by \( 19 \% \) each year. Step 4 of S: 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 Portrait inc: If you are able to invest money for less than 4 years, then you will get a quick return on your investment. Portrait Inc: If you are able to invest money for more than 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 4 years, then their income will continue to grow at a faster rate. SO Interiors: If you are able to invest money for less than 4 years, then you will get a quick return on your investment.

To determine which company is a better investment based on their growth projections, let's analyze both Portrait Inc. and SO Interiors: 1. **Portrait Inc.** - **Current Net Income (Year 3):** \$325,000 - **Growth:** Increases by \$27,000 each year (linear growth). 2. **SO Interiors** - **Current Net Income (Year 3):** \$215,000 - **Growth:** Increases by 19% each year (exponential growth). **Investment Horizon Analysis:** - **Short-Term Investment (Less than 4 years):** - **Portrait Inc.** has a higher current net income and offers a steady annual increase of \$27,000. This provides quicker returns in the short term. - **SO Interiors** starts with a lower net income, and it takes some time for the higher growth rate (19%) to make a significant impact. - **Long-Term Investment (More than 4 years):** - **SO Interiors** benefits from exponential growth. Over time, the 19% annual increase will surpass the linear growth of Portrait Inc., leading to higher net income in the long run. - **Portrait Inc.** continues to grow steadily but at a slower rate compared to the exponential growth of SO Interiors. **Correct Statements:** 1. **Portrait Inc.:** *If you are able to invest money for less than 4 years, then you will get a quick return on your investment.* 2. **SO Interiors:** *If you are able to invest money for more than 4 years, then their income will continue to grow at a faster rate.* **Therefore, the correct choices are:** - **Portrait inc: If you are able to invest money for less than 4 years, then you will get a quick return on your investment.** - **SO Interiors: If you are able to invest money for more than 4 years, then their income will continue to grow at a faster rate.** **Answer:** • Portrait inc: If you are able to invest money for less than 4 years, then you will get a quick return on your investment. • SO Interiors: If you are able to invest money for more than 4 years, then their income will continue to grow at a faster rate.