1. An income producing property is expected to produce a net income of $10,000 next year, and the next income is expected to increase at a constant rate of 5%. Assume that the opportunity cost of capital is 10%. What should be the price and cap rate of the property?

2. You are in a meeting regarding the pro forma forecasting of business for your company, Ferd Berfel Franistats Incorporated. It is a high volume and vital electronic element needed in many products and available for consumer purchases. There is an ongoing discussion (sometimes heated) that has little agreement on how to do it. The CEO, Ferd Berfel, looks you and says, what is your recommendation and why. What do you tell him?