You are interested in purchasing a residential apartment block as a long-term investment. You have identified two identical apartment blocks in two different cities: City A and City B. The following information is also relevant: Expected annual growth in net operating income (NOI) Years 2-10: Terminal growth rate (post-Year 10): Rent income Year 1: Maintenance expense Year (does not repeat): Purchase price: Discount rate: City A 5.00% 1.00% 150000 25000 Group? City B 4.00% 1.00% 130000 25000 Group? Group? Hint 1:The terminal value of each appartment block (at the end of year 10) is calculated by using the formula of growing perpetuity Hint 2:NOI= Rent - Maintenance expense Q1:Calculate the net present value (NPV), IRR and profitability index (PI) of each potential investment. Q2: What is the best potential investment? Justify your answer.