You are considering an investment opportunity in Santa Clara, CA. You project the NOI for this property to be $500,000 in the first year (annual, in arrears), and expect the NOI to go up by 2% per year (indefinitely). The appropriate property discount rate is 6%. There is an existing (assumable) loan on the property, with constant MONTHLY payments of $80,000 for 120 months (10 years). The loan will be fully amortized at the end of year 10. Current yield (MEY) on such loans is 5%. The seller gives you the option of buying the property with or without assuming the loan. It will be a levered investment if you buy the property and assume the loan, it will be an unlevered investment if you buy the property without assuming the loan. The asking price for the equity investment (conditional on the buyer assuming the loan) is $5 million. If you don't assume the loan, the seller is willing to sell the property for $12.4 million. Which of the following is the best course of action?

	A.	Both the levered and unlevered investment have positive NPV. Levered investment has higher NPV, therefore buy the equity position (buy property and assume debt).
	B.	The unlevered investment has positive NPV, but the levered investment has negative NPV. Buy the property, but dont assume debt.
	C.	Both the levered and unlevered investment have negative NPV. Do not buy this property.
	D.	The unlevered investment has negative NPV, but the levered investment has positive NPV. Therefore buy the equity position (buy property and assume debt).
	E.	You don't have enough information to calculate and compare the NPVs of these scenarios.