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Use the direct capitalization approach to income valuation to calculate the market value of the warehouse that has been described below: Leasablc space: 50,000 square feet Average rent: $5 per square foot per year Expected annual rent growth: 5% Other income: $2 per square foot per year Expected annual growth in other income: 10% Vacancy and collection losses: 5% of potential gross income Operating expenses: 30% of effective gross income Capital expenditures: 5% of effective gross income Selling expenses: 5% of future selling price Discount rate: 10% Going-in cap rate: 7% Going-out cap rate: 7.5% 0 $2.19 million 0 $219,378 0 $2.93 million 0 $3.13 million