You are valuing land and a building using the capitalization of net operating income approach. You have determined the following: Annual rental revenue for the building is $150,000. Annual costs to operate the building include: o management fees: $10,000 o repairs and maintenance: $12,000 o utilities: $15,000 o property taxes: $11,000 Vacancies and bad debts are expected to be 9% of gross rental revenue. The income tax rate is 25%. Annual depreciation on the building is $40,000. The appropriate capitalization rate is 10%. What is the value of the land and building? Question 25 options: a) $485,000 b) $663,750 c) $885,000 d) $1,020,000