Your firm plans on purchasing an existing rental property with a remaining service life of

$35$ years. Recently, the tenants signed a $5-$year lease, fixing the rental income at $$272,000$

annually for

the next five years. Rental income is expected to increase every five years over the

remaining life of the

property. Based on this increase, the annual rental income would be $$288,320$ for years $6$

through $10,$

$$305,619$ for years $11$ through $15,$$$323,956$ for years $16$ through $20,$$$343,394$ for years $21$

through $25,$

$$363,997$ for years $26$ through $30,$ and finally $$385,837$ for years $31$ through $35.$ Operating

expenses,

including income taxes, are estimated be $$50,000$ for the first year increasing by $$10,000$

each year

thereafter. At the end of the property service life, you expect to sell the lot on which it stands

for net

amount of $$430,000.$ Alternatively, you could invest in a mutual fund that earns at the rate of

$12\%$ per

annum, what would be the maximum amount you would be willing to pay for the property at

the

present time?