Tina is considering buying a four acre parcel of land that she believes can be subdivided into 1/2 acre lots. She estimates a value of $175,000 per lot, once serviced and subdivided. She estimates servicing costs to be $280,000, overhead to be 25% of direct costs, and a reasonable allowance for holding costs and profit is 35% of net income. Based on the cost of development method, what is the indicated value of this undeveloped land? (Ignore any issues with respect to timing of cash flows or discounting). (1) $485,000 (2) $799,875 (3) $682,500 (4) $565,840