Through the conversion of a storage building which is currently unused into a flat let for rent, income could be generated. The costs for conversion, occurring at the decision point of time, would be € 35,000. In the following 10 years annual rental income of € 3,500 could be generated, occurring at the end of each year. The discount rate is selected as 4.5 %.

Would you advise to do the reconstruction? Assess the investment with the help of the net present value method.