11. A parcel of land currently valued at $1,000,000 can be obtained on a 75 -year ground lease at an annual rent of 10% of the initial capital value. The land is currently vacant, and a developer proposes to construct a building upon the site. Upon completion, the property will rent for $300,000 per annum (net). A market discount rate of j1=5.5% is used to value the profit rent. What is the appraised market value of the leasehold estate, rounded to the nearest $100 ? Assume the lease payments are payable in advance. (1) $5,650,800 (2) $3,767,200 (3) $2,823,400 (4) $4,211,300 12. The value of a leased fee estate is found by calculating the present value of the: (1) difference between market rent and contract rent for the remainder of the term. (2) difference between market rent and contract rent paid to the head lessee for the unexpired term of the sublease. (3) net operating income during the term of the lease plus the present value of the reversion at the end of the lease. (4) after-tax cash flow during the term of the lease plus the capital gain earned at the end of the lease