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Computing net present value of cash flows

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I am having problems answering question "a" (comuting NPV of cashflow using 7% discount rate), and question "b" (computing Year 5 NPV using a 7% discount rate). Also not sure if the the business should be a LLC or a corporation.

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Solution Summary

The expert computes the net present value of cash flows.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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  • "What does 1 and 0 means in the repair column?"
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  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
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