Schumer and Associates want to buy a new building. In order to pay for their building, Schumer and Associates decide to pay the down payment with 50,000 convertible preferred shares at a price of $5 each. Additionally, Schumer and Associates will make payments of $500,000 per year for 20 years. The appropriate discount rate is 4.5 percent. What is the capitalized cost of this building assuming that the fair value of the building can't be reliably determined?
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