Husky Construction Inc.'s new project of an office building will cost $700,000 to buy the land today. Construction of the office building will cost $2.1 million; this expense ($2.1 million) will be depreciated straight-line over 30 years to zero salvage value. The $2.1 million construction cost is to be paid today. The pretax value of the land and building in year 30 will be $10 million (The book value of the building construction cost is zero; The book value of the land is still $700,000.) The firm will lease the office building for $500,000 per year; payment is due at the start of the year; occupancy will begin in one year. Maintenance cost is $70,000 per year. The project will require no investment in net working capital.

Assume that the firm will finance the project with a $2,100,000 30-year loan at 10.0 percent APR with annual payments and $700,000 cash contribution from shareholders. Consider Husky Construction with the following data.