Problem: Suppose that the required return on the property in Question is 11% instead of 12%. What would the value of the property be? By what percentage has this value changed as a result of this 100-basis-point change in the required return?

Question: Consider a property with expected future net cash flows of $25,000 per year for the next five years (starting one year from now). After that, the operating cash flow should step up 20%, to $30,000, for the following five years. If you expect to sell the property 10 years from now for a price 10 times the net cash flow at that time, what is the value of the property if the required return is 12%?