A downtown surface parking lot generates annual net cash flow of $180,000, and this is expected to grow indefinitely at 3% per year. Based on the current use and current capital market conditions, you feel that investors require a 12% return, which implies an initial income yield of cap rate of 9% (= 12% - 3%). a. What is the indicated current use value of the property? (Remember that value equals net rent divided by cap rate.) b. A developer recently paid $4.5 million for the site. What is the implied cap rate associated with this deal? Explain why the sale price differs significantly from the current use value you calculated in part a.