Question

Financial Options: NPV Exercise David and Jennifer are looking to buy an existing business that's for sale. They found two stores that intrigue them. Let's call them Store A and Store B Both stores are for sale at the same price, $1.5 million. The uncertainty David and Jennifer are facing is the health of the economy. They researched the economic forecasts and believe that there is a 65% chance the economy will remain strong and a 35% chance that the economy may slip into a recession. If the economy does go into a recession, their expected sales will decrease. They must pay $1.5 million now (Year 0) to purchase either store. Their cost of capital is 15.0%.

Hi! I could use help answering qustions 1-5. I am counfused on how to calculate NPV. I will leave a great review!