3. DCF and NPV: You buy an office building for $2 million in cash. In the next four years, it earns cash flows of $140,000, $160,000, $225,000, and $360,000, respectively. At the end of the fourth year, you sell it for $2.5 million.

   1. Using a discount rate of 6%, what is the value of the property?

   2. Using a discount rate of 6%, what is the net present value of the investment?

   3. Using a discount rate of 12%, what is the value of the property?

   4. Using a discount rate of 12%, what is the net present value of the investment?

   5. Which discount rate is better? Why?