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Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $ 5 . 4 million. The

Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $5.4 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 $682,000. The firm believes that working capital at each date must be maintained at a level of 10% of next years forecast sales. The firm estimates production costs equal to $1.30 per trap and believes that the traps can be sold for $5 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 firms tax bracket is 35%, and the required rate of return on the project is 8%. Use the MACRS depreciation schedule in the attached image. For year 1, sales (millions of traps) were .5. For year 2, sales (millions of traps) were .7. For years 3 and 4, sales (millions of traps) were .8. For year 5, sales (millions of traps) were .7. For year 6, sales (millions of traps) were .5. Thereafter, sales (millions of traps) were 0. The project NPV is 3.6142 million. By how much would NPV increase if the firm uses double-declining-balance depreciated with a later switch to straight-line when remaining project life is only two years?
Note: Do not round intermediate calculations. Enter your answer in whole dollars not in millions.
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