Your company wants to build a new warehouse on land originally bought for a plant your company did not build. The lands original cost was 1,000,000. Its worth today is 500,000. Construction would be another 1,000,000. Depreciation would be over 20 years with a scrap value of -10,000. Sales would increase by 800,000 per year and SG&A would increase by 50,000 per year. Your cost of capital is 8%. Would you recommend building the warehouse?

Please show all work and formulas used. Thanks.