Assume You Bought a $400,000 House, Using an 80% Interest-Only

Assume you bought a $400,000 house, using an 80% interest-only mortgage. Transaction costs associated with the purchase amounted to $4,000. You estimate a net benefit of $2,000 per
Month from owning the home (e.g., the enjoyment of home ownership and the tax deductibility
Of the interest expense less the cash outflows associated with the mortgage payments, property
Taxes, etc.) At the end of a year, you receive a job transfer and are forced to sell your home.
Unfortunately, your employer doesn't provide any aid in this matter, and market values have
Declined. The real estate commission is 6% and other transaction costs associated with the sale
Amounted to about 1% of the selling price of $375,000. Assume the appropriate cost of capital
To use is 8% a year. What is your NPV on your investment?

A) -$36,360
B) -$120,178
C) +$261,909
D) -$108,462