Problem:
Boone Brothers purchased a parcel of land 8 years ago for $344 thousand. At that time, the firm invested $199 thousand modifying the site so that it could be leased to an adjacent car dealer for displaying used car inventory. The lease payment was $40 thousand 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 $1.32 million. Boone Brothers has no loans or mortgages secured by the property.
Required:
Question: What total relevant initial cost of the hotel project for the use of this land?
Note: Please show guided help with steps and answer.