A developer plans to start construction of a building in one year if at that point rent levels make construction feasible. At that time, the building will cost $$1,000,000$ to construct. During the first year after construction would take place, there is a $60$ percent chance that NOI will be $$150,000$ and a $40$ percent chance that the NOI will be $$75,000.$ In either case, NOI would be expected to increase at $2$ percent per year after the first year.

Required:

What is the value of the land at the end of the year in both possible scenarios?

How much should the developer be willing to pay for the land?