You are considering the purchase of an apartment building that generated $$325,000$ over the past year in cash flows to the owner. The cash flows are expected

to keep pace with the inflation rate of $3\mathrm{.}3$ percent and occur at the end of each year forever. If you require an $11$ percent nominal return on your investment,

how much will you pay for the building today?

Years for cash flows

Land value after demolition

Value of cash flows

Value of land today

Value of building