1. I can buy a plot of land for $80,000, and spend a further $60,000 to build a house on it. The construction will take one year to complete, and the construction cost will be paid when it is completed. I expect to sell the house as soon as the construction is completed. The price of the house will be either 200,000 or 100,000 with equal chances. A similar risk investment would give me an expected return of 20 percent.
   1. What is the expected return from my house building venture?
   2. What is the PV of the house?
   3. What is the NPV of the project?