1. Racine is thinking of buying a new home. Currently, she owns an older home that costs her approximately $11,000 a year. The cost of the new home is $150,000. She can obtain a $120,000 mortgage for 30 years at 4% interest. The home has no homeowners association dues. Annual costs for property taxes, hazard insurance and estimated landscaping/maintenance is approximately $450, $1,000, and $600. She estimates that she will live in the home for six years and resell it for $185,000. Racines discount rate is 7%.

Is this a good investment according to NPV? IRR?