Diligent Investor is considering purchasing Fair Oaks Apartments. The asking price is $1,000,000. If Mr. Investor buys the property, he would finance it with a70% LTV loan. He expects the property to generate the following cash flows from operations in the next 3 years. Year 1 Year 2 Year 3 Potential Gross Income $180,000 190,000 200,000 Effective Gross Income 160,000 170,000 180,000 Operating Expenses 60,000 60,000 65,000 Net Operating Income 100,000 110,000 115,000 Debt Service 75,500 75,000 75,000 Before-Tax Cash Flow 25,000 35,000 40,000 Tax Liability 13,250 19,250 22,750 After Tax Cash Flow 11,750 15,750 17,250 Diligent investor plans to sell the property after 3 years. The selling price is expected to be $1,200,000. After paying off the mortgage balance and applicable taxes, the after-tax cash flows from disposal (after-tax equity reversion) is expected to be $529,000.32. Assuming Diligent Investor's required rate of return is 10%, calculate the Present Value of after-tax cash flows from this investment. a. $134,100 b. $243,400 c. $300,000 d. $434,100