Expected net present value of this purchase opportunity

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Stu can purchase a one-bedroom house near his college today for $110,000, including the cost of some minor repairs. He expects to be able to resell it in four years for $150,000 if he just puts a little effort into cleaning up the property. At a discount rate of 6.5 percent, what is the expected net present value of this purchase opportunity?

a. $3,001.61

b. $2,487.43

c. $6,598.46

d. $7,208.18

e. $4,311.02

Reference no: EM131027053

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