Problem 6-18 Depreciation and project NPV Suppose that Sudbury Mechanical Drifters is proposing to invest $12.0 million in a new factory. It can depreciate this investment straight-line over 10 years. The tax rate is 35%, 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.) Answer is complete and correct. Straight-line Schedule Straight-line, 10-year Tax Shields at 35% Tc PV (Tax Shields) at 10% Year Year Year Year Year Year Year Year Year Year Total 1 2 3 4 5 6 7 8 9 10 $ 1.2 $ 1.2$ 1.2 $ 1.2$ 1.2 $ 1.2 $ 1.2$ 1.2 $ 1.2 $ 1.2 $ 12.0 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4 $ 0.4$ 4.2 0.4 0.3 $ 0.3 $ 0.3 $ 0.3 0.2 $ 0.2 $ 0.2 $ 0.2 $ 0.2 $ 2.6 b. Suppose that the government allows companies to use double-declining-balance depreciation with the option to switch at any point to straight-line. what is the present value of the depreciation tax shields? (Enter your answers millions rounded to 1 nal place.) X Answer is not complete. Double decline Schedule Start of Year Book Value Depreciation Tax Shields at 35% Tc PV (Tax Shields) at 10% Year Year Year Year Year Year Year Year Year Year 1 2 Total 3 4 5 6 7 8 9 10 $ 12.0 $ 9.6$ 7.7 $ 6.2 X $ 5.0 X $ 4.0 X $ 3.2 X $ 2.6 X $ 2.1 X $ 1.7 X $ 54.1 X $ 2.4 $ 1.9 $ 1.5 $ 1.2 $ 1.0 $ 0.8 $ 0.6 X $ 0.5 X $ 0.4 X $ 0.3 X $ 10.6 X $ 0.8 $ 0.7 $ 0.5 $ 0.4 $ 0.4 X $ 0.3 $ 0.2 X $ 0.2 X $ 0.1 X $ 0.1 X $ 3.7 X $ 0.7 $ 0.6$ 0.4$ 0.3 $ 0.2 $ 0.2 $ 0.1$ 0.1$ 0.1$ 0.1