Athena Investment Company is considering the purchase of an office property. After a careful review of the market and the leases that are in place, Athena believes that next year's cash flow will be $$100,000.$ It also believes that the cash flow will rise in the amount of $$6,600$ each year for the foreseeable future. It plans to own the property for at least $10$ years. Based on a review of sales of properties that are now $10$ years older than the subject property, Athena has determined that cap rates are in a range of $0\mathrm{.}10.$ Athena believes that it should earn an IRR $($required return$)$ of at least $11$ percent.

Required:

a$.$ What is the estimated value of this office property $($assume a $0\mathrm{.}10$ terminal cap rate$)?$

b$.$ What is the current, or going$-$in$,$ cap rate for this property?

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

What is the estimated value of this office property $($assume a $0\mathrm{.}10$ terminal cap rate$)?$

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

Estimated value of the property

$$2,272,727$