Assume you are the controller of Beacon Commercial Real Estate and you are beginning the 2010 fiscal year. Beacon is in the business of constructing and leasing shopping malls in the northeast United States. In 1990, you constructed a shopping mall in Scranton, PA at a total capitalized cost of $15,000,000. You placed the asset in service on July 31, 1990. You estimate it has a service life of 30 years, a salvage value of $ 250,000, and you depreciate it using the straight line method. The shopping mall has a total of 110 leasable units. In 2008, you leased 100 units at an average of $15,000 per unit. However, due to the recession in 2009, several boutique shops have declared bankruptcy and you are now only leasing out 85 units at an average of $13,500 per year. Based on current market conditions, you believe this condition will persist until 2012. Starting at the beginning of 2012, you estimate you will have 95 units leased at an average of $15,000 annually until the end of 2015. You do not plan on selling the mall at the end of 2015. (Assume all lease payments are received at the end of the year). Don't forget the interest, depreciation, and taxes in computing cash flows. Assume the following capital structure. Debt 5,500 5.25% coupon bonds outstanding ($1,000 face value), 10 years to maturity, selling for 88% of par; the bonds make semiannual interest payments. Common Stock 250,000 shares outstanding, selling for $25 per share, the beta is 0.87 Market 7.5 % total expected market return with a risk-free rate of 1.75% Taxes 30% effective tax rate