A group of investors decides to buy a rental property for $2,500,000. This property is expected to generate $15,000 rental income for the first year, but it is expected to generate $30,000 rental income for each year after that. At the end of three years, the investors plan to sell the rental property, which is expected to sell at a gain of $300,000.

(a) If the target rate of return for this investment is 4%, what is the net present value (NPV) of this rental property?

(b) Based on your answer to party (a), will the purchase of this income property be a good investment?