Brian Duke buys a lot and building in a busy downtown area for $1,000,000. He plans on tearing down the building immediately and constructing an apartment building in its place, which would cost him an additional $1,375,000. The apartment building would be finished in a year after purchase of the property, and he could then rent the apartments (which can be considered to be filled immediately) for a net income of $500,000 per year. The apartment complex is depreciated using a straight-line method with a 27.5 depreciable life and zero salvage value. Mr. Duke plans to sell the apartments in 15 years and retire. Assume that Mr. Duke has a 34% income tax rate and that the capital gain from selling the apartments would have a 20% tax (instead of being taxed as regular income)