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10. ( 8 points, 4+4) Consider an income producing property that according to your assumptions and estimations is currently worth $4M on an unlevered basis

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10. ( 8 points, 4+4) Consider an income producing property that according to your assumptions and estimations is currently worth $4M on an unlevered basis when a 7.5% required rate of return is applied. One of the assumptions that you have made when arriving at that estimate is that you will sell the property in 6 years for a CAP of 8%, which translates to $4.4M at that future point in time. a. At what price will you sell the property in 6 years if all your assumptions materialized except that you will sell the property for a CAP Wf 7% instead of 8% ? Show your calculations. b. All other things equal, by how much the situation described in part a affects the current value of the property. Show your calculations

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