The table below shows the projected net cash flows (including reversion) for Property A and Property B. If both properties sell at fair market value for a cap rate (initial and terminal net cash yields) of 7%, then which of these two properties is perceived to be riskier by the market?Why?

Annual net cash flow projections for two properties ($1,000,000s):

Year:12345678

A$1.0000$1.0000$1.0000$1.0000$1.0000$1.0000$1.0000$1.0000

9 10

$1.0000$15.2857

B$1.0000$1.0200$1.0404$1.0612$1.0824$1.1041$1.1262$1.1487

9 10

$1.1717$18.6093