Your firm is considering purchasing an old office building with an estimated remaining service life of $25$ years. Recently, the tenants signed long$-$term leases, which leads you to believe that the current rental income of $$150,000$ per year will remain constant for the first $5$ years. Then the rental income will increase by $10\%$ for every $5-$year interval over the remaining life of the asset. For example, the annual rental income would be $$165,000$ for years $6$ through $10,$ $$181,500$ for years $11$ through $15,$ $$199,650$ for years $16$ through $20,$ and $$219,615$ for years $21$ through $25.$ You estimate that operating expenses, including income taxes, will be $$45,000$ for the first year and that they will increase by $$3,000$ each year thereafter. You also estimate that razing the building and selling the lot on which it stands will realize a net amount of $$50,000$ at the end of the $25-$year period. If you had the opportunity to invest your money elsewhere and thereby earn interest at the rate of $12\%$ per annum, what would be the maximum amount you would be willing to pay for the building and lot at the present time? Ans: $940002$

Show all the steps and working and include a cashflow diagram