E! E Find F. lr }+-:;r'=I[-'..r:-rl\\ n Questian-... I E} ,lm' CJ'm eBook Print Check my work Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $6.3 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 $536900. The rm 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 $1.10 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 rm's tax bracket is 35%. and the required rate of return on the project is 10%. Use the M (Leprecuation schedule. 7 Year; 7 ' 7 704' - .. , W7 4_ 7 "757 '77 5 Thereafter" Sales (millions of traps) a. What is project NPV? (Do not round intermediate calculations. Enter your answer in millions rounded to 4 decimal places.) b. By how much would NPV increase If the rm depreciated its investment usrng the 5-year MACRS schedule? (Do not round intermediate calculations. Enter your answer in whole dollars not in millions.) The NPV increases by