Consider an income producing property that according to your assumptions and estimations is currently worth $4M on an unlevered basis when an 8.5% required rate of return is applied. One of the assumptions that you have made when arriving at that estimate is that you will sell the property in 6 years for a CAP of 8%, which translates to $4.8M at that future point in time.

a. At what price will you sell the property in 6 years if all your assumptions materialized except that you will sell the property for a CAP of 9% instead of 8%? Show your calculations.

b. All other things equal, by how much the situation described in part a affects the current value of the property. Show your calculations.