P$2.$ Your estimated NOI for the first year of operations for a property you are

considering is $$75,000,$ and your required rate of return is $12$ percent.

$($a$)$ If you expect the NOI to remain constant at $$75,000$ for the next $50$ years, and

you also expect the property to then be worth nothing, what is your present

value of the property? If you pay this amount, what is the market cap rate?

$($b$)$ If you expect the NOI to remain constant forever, what is the value of the

property? If you pay this amount, what is the initial cap rate?

$($c$)$ If you expect the NOI to grow forever at a $3$ percent annual rate, what is the

value of the property? Initial cap rate?

P$3.$ The expected total return on a property you are