The table below provides 8 years of projected cash flows for a property that you have been asked to value using the discounted cash flow approach to income valuation.

Assumptions:

Going-in cap rate: 6.0%

Going-out cap rate: 6.5%

Discount rate: 9.0%

Selling expenses: 5.0% of future selling price

	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8
PGI	$750,000	$787,500	$826,875	$868,219	$911,630	$957,211	$1,005,072	$1,055,325
EGI	$712,500	$748,125	$785,531	$824,808	$866,048	$909,351	$954,818	$1,002,559
NOI	$427,500	$448,875	$471,319	$494,885	$519,629	$545,610	$572,891	$601,535

Based upon a hold period of 6 years estimate the market value of the income-producing property.

$7.14 million

$8.45 million

$8.49 million

$9.31 million

Please show full solution through a financial calculator.