9 Problem 04-14 (Algo) [LO 4-6, 4-7] 10 points eBook Print Firm W, which has a 30 percent marginal tax rate, plans to operate a new business that should generate $43,000 annual cash flow and ordinary income for three years (years 0, 1, and 2). Alternatively, Firm W could form a new taxable entity (Entity N) to operate the business. Entity N would pay tax on the three-year income stream at a 20 percent rate. The nondeductible cost of forming Entity N would be $5,300. Firm W uses a 5 percent discount rate. Use Appendix A and Appendix B. Required: a. Complete the below tables to calculate NPV. b. Should it operate the new business directly or form Entity N to operate the business? References Complete this question by entering your answers in the tabs below. Required A Required B Complete the below tables to calculate NPV. Note: Cash outflows should be indicated by a minus sign. Round discount factors to 3 decimal places. Round intermediate calculations and final answers to the nearest whole dollar amount. Business operated by Firm W: After-tax cash flow at 30% tax rate Discount factor (5%) Present value NPV Business operated by Entity N: After-tax cash flow at 20% tax rate Cost of forming Entity N Net cash flow Discount factor (5%) Present value NPV Year 0 Year 1 Year 2 0 $ 0 $ 0 $ 0 $ $ 0 < Required A Required B > Required A Required B Should it operate the new business directly or form Entity N to operate the business? Operate the new business directly Form Entity N to operate the business < Required A Required B