A freehold reversion produces $30,000 p.a. for 5 years and thereafter the full rental value. The current market rental value is $45,000 p.a. Freeholds in similar properties let at full rental value sell at notional yields of 7%. Investors regard this type of investment as more attractive than properties let at full rental value. Value the freehold reversion using a 7% yield for the term and 5% yield for the reversion. The answer is: a. $687,547.32 b. $868,547.32 c. $746,693.48 d. $764,693.48