You are going to purchase land for $20 Million right outside of Denver CO. You expect significant residential and commercial growth to reach the area within the next 10 years, greatly increasing the value of the property. You have an idea. Purchase the land now, lease it to an individual for 10 years who will create a commuter parking lot together with a bus service to downtown Denver, and then you sell the land after 10 years for an estimated $50 million after-tax.

You estimate you can lease the land to the individual for $1 million before-tax for the first year with an escalation of 3% per year. You will also face property tax expense of $0.1 million for the first year which you will estimate will increase 3% per year. You will be able to deduct the property tax from your lease revenue for tax purposes. Assume the first lease and property tax payments occur at end of year 1.

Your tax rate is 25% and discount rate is 10%

What is the net present value (NPV) now (end of year 0) of purchasing the land, leasing it, and selling it after 10 years per the estimated factors above?