Consider the following projected cash flows $($including reversion$)$ for Property A and Property

B for the following $10$ years. Assume that operating cash flows $($excluding reversion$)=$ NOI,

there are no capital expenditures.

Annual net cash flow projections for two properties $($ $ millions$)$

a$.$ What is the annual growth rate in operating cash flows for each building during the first

nine years?

b$.$ If both properties sell at cap rates $($initial and terminal cash yields$)$ of $9\%,$ what is the

expected annual return $($IRR$)$ on a $10-$year investment in each property?