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Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $6.6 million. The equipment will be

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Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $6.6 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 $643,000 The firm believes that working capital at each date must be maintained at a level of 15% of next year's forecast sales he inm estimates production costs equal to $1.90 per trap and believes that the traps can be sold for $6 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 12% Use the MAC RS depreciation schedule Year: 123456 Thereafter Sales (millions of traps) 0.4 0.5 0.700-70.5 0 egative amount should be indicated by a minus sign. Do not round intermediate calculations, Enter your answer in millions rounded to 4 decimal places NPV million b. By how much would NPV increase if the firm depreciated its investment using the 5 year MACRS schedule? (Do not round intermediate calculations. Enter your answer in whole dollars not in millions) The NPV Increases by

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