A firm is considering the purchase of a forty-year old building. The following pertinent data were provided

Acquisition cost.........12,000,000

Economic life (reamining)..10 years

Salvage value........200,000

Annual rental income...5,000,000

Annual expenses....3,000,000

Net income before tax and depreciation....2,000,000

Depreciation (straight line method)....1,000,000

Net income before tax...1,000,000

Income tax(withheld by lessors)..50,000

Average net annual earning...950,000

1. Required: evaluate the proposal using the three basic methods