First-year NOI from a long-term net lease is expected to be $50,000. Rent is escalating at a rate of 3 percent per year, but there is a two year period between adjustments. Thus, the income for years 1 and 2 will be $50,000, increasing to $50,000(1+.03)**2 = $53,045 in years 3 and 4, and so on. The discount rate is 14 percent. Assuming beginning-of-year payments, what is the approximate value of the leased fee?

Question 11 options:

1)

$454,545

2)

$294,118

3)

$448,430

4)	none of the above