P$612$ Valuation fundamentals Imagine that you are trying to evaluate the economics of purchasing a condominium to live in during college rather than renting an apartment. If you buy the condo, during each of the next $4$ years you will have to pay property taxes and maintenance expenditures of about $$6,000$ per year, but you will avoid paying rent of $$10,000$ per year. When you graduate $4$ years from now, you expect to sell the condo for $$125,000.$ If you buy the condo, you will use money you have saved that is currently invested and earning a $4\%$ annual rate of return. Assume for simplicity that all cash flows $($rent$,$ maintenance, etc.$)$ would occur at the end of each year.

a$.$ Draw a timeline showing the cash flows, their timing, and the required return applicable to valuing the condo.

b$.$ What is the maximum price you would be willing to pay to acquire the condo? Explain.