BIC is also considering an office building. BIC has done extensive market analysis and has estimated that - based on current market supply and demand, rents, and its estimate of operating expenses - annual NOI for the property will be $1,000,000 and is expected to increase by 1.5% per year based upon expected capital improvements. Bulldog believes that investors should earn 8% total return on this type of investment.

End of Year	NOI
1	1,000,000
2	1,015,000
3	1,030,225
4	1,045,678
5	1,061,364
6	1,077,284
7	1,093,443
8	1,109,845

A) What cap rate should be found from recently sold properties that are comparable to this office building?

B) Assuming the investment will be owned for 7 years and then sold, what is the value of the property today?

C) Should they buy if the final negotiated list price is $13,250,000?