An investor is considering the purchase of a small office bullding. The NOI is expected to be the following: Year $1,$$$216,000$; Year $2,$ $$226,000$; Year $3,$$$236,000$; Year $4,$$$246,000$; Year $5,$$$256,000.$ The property will be sold at the end of year $5$ and the investor belleves that the property value should have appreciated at a rate of $3$ percent per year during the five$-$year perlod. 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 $10\%$ IRR?

c$.$ Based on your answer in $($b$),$ if the building could be reproduced for $$2,460,000$ today, what would be the underlying value of the land?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

Required C

What should be the present value of the property today?

Note: Do not round intermediate calculations, Round your final answer to nearest whole dollar amount.

Present value of the property