An investor is considering the purchase of a small office building. The NOI is expected to be the following: Year $1,$ $$200,000$; Year $2,$ $$210,000$; Year $3,$ $$220,000$; Year $4,$ $$230,000$; Year $5,$ $$240,000.$ The property will be sold at the end of year $5$ and the investor believes that the property value should have appreciated at a rate of $3$ percent per year during the five$-$year period. The investor plans to pay all cash for the property and wants to earn a $10$ percent return on investment $($IRR$)$ compounded annually.

Required:

a$.$ What should be the present value of the property today?

b$.$ What should be the property value $($REV$)$ at the end of year $5$ in order for the investor to earn the $10$ percent IRR?

c$.$ Based on your answer in $($b$),$ if the building could be reproduced for $$2,300,000$ today, what would be the underlying value of the land?