The initial cost of the hotel project for the use of land

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Boone Brothers purchased a parcel of land 9 years ago for $363,000. At that time, the firm invested $109,000 modifying the site so that it could be leased to an adjacent car dealer for displaying used car inventory. The lease payment was $40,000 a year. Boone Brothers is now considering building a hotel on the site as the auto dealer is relocating to make room for a nearby shopping mall to expand. The current value of the land is $1.5 million. Boone Brothers has no loans or mortgages secured by the property. What value should be included in the initial cost of the hotel project for the use of this land?

Reference no: EM13972530

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