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Zack has a two-bedroom house with a huge garage. He is paying $1,500 for his monthly mortgage payment. Since he doesn't have a car, he
Zack has a two-bedroom house with a huge garage. He is paying $1,500 for his monthly mortgage payment. Since he doesn't have a car, he is considering remodeling the garage, turning it into a master suite, and renting it on Airbnb. The remodeling cost is estimated to be $10,000 and he believes he could make $500 a month for the next five years by renting the suite on Airbnb. Assuming a 6% interest rate, what is the NPV of remodeling the garage? Hint: Pay attention that APR is 6% while the rent cash flows are monthly! Round your answer to the nearest dollar and enter without $ sign. For example, enter 743 for $742.76
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