The Riker Chrome Plating Company is currently operating out of Pittsburgh, Pennsylvania and has been moderately successful in building a dedicated clientele throughout the north and mid$-$eastern portion of the country. Riker now is considering expanding its facilities to another region. Riker has land located in Macon, Georgia it acquired some years ago at a cost of $$455,000$ and now wants to utilize the land for purposes of accomplishing its expansion. The upfront cost of constructing the building is estimated to be $$1,850,000$ and it would take a year to complete the construction and begin production. The tubs, chemicals, electrical charging equipment and fabrication equipment necessary to start production would cost $$1,496,000$ which would be paid for at the start of production. Both the plant and equipment would be depreciated on a straight$-$line basis over the $20-$year life of production, for which at the end of that time, the property and plant could be sold for $$750,000$ and the chroming equipment could be scrapped for $$80,000.$ Estimated sales from production would be $$1$ million per year with $9$ percent of that going to cover variable costs. Annual fixed costs are estimated to be $$50,000.$ The project will require an unrecoverable $$10,000$ of net working capital at the start of production. The land could alternatively be sold to a buyer willing to pay $$1\mathrm{.}78$ million. Riker's requires a $12$ percent rate of return and is subject to a tax rate of $34$ percent.

$1.$ If Riker$$s management decides to go forward with taking on the construction, what is the proper cash flow amount to use as the initial investment? Show your computation.

$2.$ If Riker$$s management selects option $1,$ what are the proper cash flow amounts $($assume end$-$of$-$year cash flows$)$ that will occur over each of the $20$ years of production? Show your computations.

$3.$ What is the net present value of taking on the project? Show your computations.

$4.$ From a strictly financial point of view, would it be prudent for Riker to sell the land? Carefully explain your reasoning.