A real estate investment has the following characteristics:

Annual rental income $1,900,000

Annual operating expenses $1,500,000

Available mortgage rate 6.5%

Financing percentage 80%

Capitalization Rate 12.5%

Estimated holding period 5 years

Investor's tax rate 25%

Based on the income approach, the value of the investment is closest to:

$2,400,000

$3,200,000

$4,266,667