A real estate developer seeks to determine the most economical height for a new office building. The building will be sold after 5 years. The relevant net annual revenues and salvage values are as follows:

	Height
	2 Floors	3 Floors	4 Floors	5 Floors
First cost (net after-tax)	$500,000	$750,000	$1,250,000	$2,000,000
Lease revenue	199,100	169,200	149,200	378,150
Net resale value (after-tax)	600,000	900,000	2,000,000	3,000,000

(a) The developer is uncertain about the interest rate (i) to use, but is certain that it is in the range of 5% to 30%. For each building height, find the range of values of i for which that building height is the most economical. (b) Suppose that the developers interest rate is known to be 15%. What would be the cost, in terms of net present value, of an error in overestimation in resale value (the true value resulted in a value 10% lower than that of the original estimate)?