Your client wants to buy a freehold property which is expected to produce a rent of HK$2,000,000 pa for 3 years followed by HK$3,000,000 pa for the following 3 years followed by HK$4,000,000 pa for the final 3 years of a 9 year lease. The rents are paid annually in arrears. Advise your client about the likely capital value of the freehold property using 8% to discount the rents. Apply direct capitalization method to estimate the terminal value of the property at the end of year 9 by using annual rental in year 9 and a cap rate of 5%. (Please use excel to do the calculation then copy the table to the word file for submission)