You are considering purchasing an office building for $3,500,000. You expect the potential gross income (PGI) in the first year to be $490,000; vacancy and collection losses to be 7 percent of PGI; and operating expenses and capital expenditures to be 25 percent and 6 percent, respectively, of effective gross income (EGI). Assume above-the-line treatment for capital expenditures. What is the implied first-year overall capitalization rate? Excel 9.8 percent 9.0 percent 7.1 percent 6.8 percent