You are looking at two $10-$year cash flow projections $($in

millions, including resale$)$ for the same property. The top row shows the estimates

the seller of the property is presenting. The bottom row shows the results of your

own careful research. The seller and all prospective buyers $($including you$)$ think

the property will sell for $$11$ million. You are also considering another investment

of similar risk that would bring you an annualized return of $15\%.$

Year $12345678910$

Seller $1\mathrm{.}0001\mathrm{.}0221\mathrm{.}0441\mathrm{.}0671\mathrm{.}0911\mathrm{.}1151\mathrm{.}1391\mathrm{.}1651\mathrm{.}19013\mathrm{.}216$

You $1\mathrm{.}0001\mathrm{.}0001\mathrm{.}0001\mathrm{.}0001\mathrm{.}0001\mathrm{.}0001\mathrm{.}0001\mathrm{.}0001\mathrm{.}00012\mathrm{.}000$

$($a$)$ What is the market cap rate if the property sells for $$11$ million