Problem 6-18 Depreciation and project NPV Suppose that Sudbury Mechanical Drifters is proposing to invest $10.3 million in a new factory. It can depreciate this investment straight-line over 10 years. The tax rate is 40%, and the discount rate is 10%. a. What is the present value of Sudbury's depreciation tax shields? (Enter your answers in millions rounded to 1 decimal place.) Straight-line Schedule Straight-line, 10-year Tax Shields at 40% TC PV (Tax Shields) at 10% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total $ 1.01 $ 1.01 $ 1.01 $ 1.01 $ 1.0 $ 1.01 $ 1.01 $ 1.01 $ 1.01$ 1.01 $ 10.7 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 0.4 $ 0.4 $ 0.4 $ 4.3 $ 0.4 $ 0.3 $ 0.3 $ 0.3 $ 0.3 $ $ 0.2 0.2 $ 0.2 $ 0.1 $ 0.2 2.4 b. Suppose that the government allows companies to use double-declining-balance depreciation with the option to switch at any point to straight-line. Now what is the present value of the depreciation tax shields? (Enter your answers in millions rounded to 1 decimal place.) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Tota $ 10.31 $ 8.6 $ 6.8 $ 5.5 $ 4.4 $ 3.5/ $ 2.8 $ 2.1 $ 1.4 $ 0.7 Double decline Schedule Start of Year Book Value Depreciation Tax Shields at 40% TC PV (Tax Shields) at 10% c. What would be the present value of the tax shield if the government allowed Sudbury to write-off the factory immediately? (Enter your answer in millions rounded to 1 decimal place.) Percent value of depreciation tax shields