8. Using the discounted cash flow method to estimate the present value of a real estate investment Dakota is considering buying a rental property that has been offered for sale for $225,000. Dakota has specified the following objectives, expectations and estimates: She desires an after-tax rate of return of 5%. After expenses, the property is expected to generate after-tax cash flows of $5,100, $5,100, $5,200, and $5,300 over the next four years, respectively. The property is expected to appreciate in value, and she expects to sell it in four years for $275,000 (after expenses). Given these expectations and objectives, complete the following table to calculate the present value of the property using the discounted cash-flow method and the interest table provided. Ch 16: Assignment Real Estate and High-Risk Investments Interest factors - Present value of a single amount Years 1 4% 0.9615 5% 6% 7% 8% 2 0.9524 0.9434 0.9346 0.9259 0.9246 0.9070 0.8900 0.8734 0.8573 3 0.8890 0.8638 0.8396 0.8163 0.7938 4 0.8548 0.8227 0.7921 0.7629 0.7350 5 0.8219 0.7835 0.7473 0.7130 0.6806 6 0.7903 0.7462 0.7050 0.6663 0.6302 Note: Round your answers in the last column to the nearest dollar. Discounted Cash Flow to Estimate Price After Tax Cash Flow Present Value of $1 at 5% Present Value of After-Tax Cash Flow. Year 1 $5,100 Year 2 5,100 Year 3 5,200 Year 4 5,300 Sale price of property at the end of Year 4 $275,000 Present value of property Assuming no changes in her estimates, if Dakota purchases the property at the asking price of $225,000, she Dakota wants to quit while she's ahead so decides to make an offer of meet her goals