$1.$ At what year does the Present Value of an income stream of $$100,000$pa approach effectively the same as the income stream in perpetuity at the following discount rates:

$($a$)15\%$

$($b$)10\%$

$($c$)5\%$

$($d$)2\%$

$2.$ What does this say about the validity of using the capitalisation rate methodology to the valuation of an income producing property?

$3.$ If you own a residential property valued at $$2,000,000$ that has a weekly market rent of $$750$ and you pay rates and insurance costs of $$9,000$pa$.$ What is your Reversionary Yield?

$4.$ Referring to your answers to Questions $1$ to $3$ above can you explain why residential real estate is not valued using the capitalisation method?