1. Use the information provided below to calculate the year 1 potential gross income for the office building that has been described: Leasable Space: 50,000 square feet Average Rent: $25 per square foot per year Annual Rent Increase: 5% Vacancy and collection losses: 10% of potential gross income Other Income: $1 per square foot per year Other Income Growth: 3% per year Operating expenses: 40% of effective gross income Capital expenditures: 5% of effective gross income Going-in cap rate: Going-out cap rate: 6.5% Discount rate: 10% Selling expenses: 5% of selling price 5% $1.25 million $1.175 million $15 million $1.125 million