1. A developer plans to start construction of a building in one year if at the point rent levels make construction feasible. At that time the building will cost $1,500,000 to construct. During the first year after construction takes place, there is a 70% chance that NOI will be $185,000 and a 30% chance NOI will be $75,000. In both case, NOI would be expected to increase at 2% after year one. How much should the developer be willing to pay for the land to get a 11% IRR?

   		$349,603
   		$716,270
   		$505,952
   		none of the above