You would like to develop an office building. Your analysts forecast that it will cost you $1,000,000 immediately (time 0), and it will cost you $700,000 in one year (time 1). They forecast you can sell the building for $2,400,000 in two years (time 2).

1. If your discount rate is = 5%, what is the net present value of this investment?

2. If your discount rate is = 11%, what is the internal rate of return for this investment?

3. If your discount rate is = 63% should you invest in this building? Write 0 for no, and write 1 for yes.

Anwer should be like this: PV =