Exercise 1 You are considering building an apartment building. The construction of the building will cost $800,000, plus $40,000 in initial taxes paid to the city. You've owned the land you will build on since 2010, it was purchased for $300,000 but never put in use. A recent assessment of the land valued it at $430,000. In addition to the cost of construction, you will need to increase inventory by $10,000 at the onset of the project. You expect the rental income in the first year tota! $115,000 and the associated costs to be 20% of that. You anticipate increasing the rent by 5% each year. In fou years your intention is to sell the building and believe that you will be able to sell it for $600,000. The project is riskier than your typical investment and requires a 2% risk premium on your 10% WACC. Your tax rate is 30%. What is the NPV of this project?