Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $5.7 million. The equipment will be depreciated straight line over 6 years to a value of zero, but in fact it can be sold after 6 years for $671,000. The firm believes that working capital at each date must be maintained at a level of 10% of next year's forecast sales. The firm estimates production costs equal to $1.80 per trap and believes that the traps can be sold for $8 each. Sales forecasts are given in the following table. The project will come to an end in 6 years, when the trap becomes technologically obsolete. The firm's tax bracket is 35%, and the required rate of return on the project is 11%. Use theMACRS depreciation schedule.

Recovery Period Class Year ( s ) 3 Year 5 Year 7 Year 10 Year 15 Year 20 Year 3.3. 35 20.00 14.29 10.00 5. 00 3.75 44.45 32.00 24.49 18.00 9.50 7.22 14. 81 19.20 17.49 14.40 8.55 7.41 17.52 12.49 11.52 7.70 6. 18 17.52 8.93 9.22 6. 93 5.71 5. 76 8.92 7.37 6. 23 5. 28 8. 93 6. 5.5 5. 90 4. 8.9 4. 46 6. 5.5 5.90 4.52 6.56 5. 91 4. 46 6.55 5. 90 4. 46 3.28 5. 91 4. 46 5.90 4. 46 5. 91 4.46 14 5.90 4. 46 15 5.91 4. 46 16 2.95 4.46 17 - 20 4. 46 21 2. 23 Notes : 1 . Tax depreciation is lower in the first year because assets are assumed to be in service for { months . 2. Real property is depreciated straight - line over 27. 5 years for residential property and 29 years for nonresidential property