Question: A developer plans to purchase a vacant lot and build apartment units for which represent the highest and best use of the land. Assuming the

A developer plans to purchase a vacant lot and build apartment units for which represent the highest and best use of the land. Assuming the anticipated NOI for the projected units for $850,000, the market-derived cap rates for the building and land are 11% and 9% respectively, and the projected value of the proposed building is 5,900,000. Based on the land residual technique, the land value would be.

a. $2,166,667

b. $2,233,333

c. $2,600,000

d. $2,900,000

The answer falls outside of the range provided.

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