Question 3: This property has been presented to you as an 8% cap rate deal, but the property is still absorbing occupancy. You believe the acquisitions team has got the projections of cash flows about right, but their use of a 7.1% terminal cap rate (as calculated as the eighth year NOI divided by 7.1%) makes you feel like this is an aggressive deal. Rising interest rates are also cause for concern. Given your concerns, you would like to stress-test the value. What is the net present value of this project if you used the following assumptions?Loan-to-Value: 33.3%Cost of Equity: 14%Cost of Debt: 6.5%Assumptions of Income Taxes: no taxes as you are taxed as a REITTerminal Cap Rate: 8%Assume a 2% brokerage fee upon a sale of the property.Recalculate the NPV of the cash flows using the assumptions above. What value do you come up with? The property is available for purchase at $9,520,000. Should you move forward with the transaction given your revised assumptions?