Suppose that you are the manager of a small company that is contemplating construction of a suburban office block. The cost of

buying the land and constructing the building is $$775,000.$ Your company has cash in the bank to finance construction. You forecast a

shortage of office space in the area and predict that you will be able to rent out the building for two years at $$33,750$ a year. You

forecast that at the end of that time you will be able to sell the building for $$870,000.$

Thus, there are now two future cash flows$--$a cash flow of $c_1=$$$33,750$ at the end of one year and a further cash flow of

$$870,000$ at the end of the second year.

a$.$ Calculate the NPV of the office building venture at interest rates of $5,10,$ and $15\%.$

b$.$ At what discount rate $($approximately$)$ would the project have zero NPV$?$