An investor wants to buy a vacant parcel of land, build a building on it and lease it as a hardware store for $5,000 a month. He estimates that the building will cost $300,000 and the expenses will be $12,000 per year. If he wants to use a 12% capitalization rate what is the most that he can pay for the land:

A: $10,000;
B: $100,000;
C: $200,000;
D: Nothing.

Answer: B: $100,000;