2) You decide to buy a small office building with 1 tenant. The tenant has a lease that calls for monthly rent payments of $2,500 per month for the next 6 years. After that, the lease expires. You expect to be able to increase the rent 4% per year for years 7-12. At the end of year 12 you intent to sell the building for $200000

a) Create a table showing the projected cash flows for the investment, assuming the next rental payment occurs one month from today.

b) Assuming you need to earn 11% on this investment, what is the maximum price you would be willing to pay for the building today? (ignore taxes and amortization for this analysis)