Assume that we have a commercial real estate property whose projected 5-year cash flows are the following:

• Year -1: -$50
• Year 0: -$100
• Year 1: $20
• Year 2: $25
• Year 3: $30
• Year 4: $35
• Year 5: $140

Assuming a discount rate of 2%. Assume further that the first years annual debt service is $5.

Given that the prevalent market cap rate at current time is 10%, what is the development profit?

Group of answer choices

$49

$52

$849

$852