Recovery Period Class Year(s) 3 Year 5 Year 7 Year 10 Year 15 Year 20 Year...

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Recovery Period Class Year(s) 3 Year 5 Year 7 Year 10 Year 15 Year 20 Year 1 33.33 20.00 14.29 10.00 5.00 3.75 234567 44.45 32.00 24.49 18.00 9.50 7.22 14.81 19.20 17.49 14.40 8.55 6.68 7.41 11.52 12.49 11.52 7.70 6.18 11.52 8.93 9.22 6.93 5.71 5.76 8.92 7.37 6.23 5.28 8.93 6.55 5.90 4.89 888 4.46 6.55 5.90 4.52 9 6.56 5.91 4.46 10 11 12 13 14 15 16 17-20 21 Notes: 6.55 5.90 4.46 3.28 5.91 4.46 5.90 4.46 5.91 4.46 5.90 4.46 5.91 4.46 2.95 4.46 4.46 2.23 1. Tax depreciation is lower in the first year because assets are assumed to be in service for 6 months. 2. Real property is depreciated straight-line over 27.5 years for residential property and 39 years for nonresidential property. Year: 0 1 2 3 4 5 6 Thereafter Sales (millions of traps) 0.5 0.7 0.9 0.9 0.6 0.3 0 a. What is project NPV? (Negative 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 Recovery Period Class Year(s) 3 Year 5 Year 7 Year 10 Year 15 Year 20 Year 1 33.33 20.00 14.29 10.00 5.00 3.75 234567 44.45 32.00 24.49 18.00 9.50 7.22 14.81 19.20 17.49 14.40 8.55 6.68 7.41 11.52 12.49 11.52 7.70 6.18 11.52 8.93 9.22 6.93 5.71 5.76 8.92 7.37 6.23 5.28 8.93 6.55 5.90 4.89 888 4.46 6.55 5.90 4.52 9 6.56 5.91 4.46 10 11 12 13 14 15 16 17-20 21 Notes: 6.55 5.90 4.46 3.28 5.91 4.46 5.90 4.46 5.91 4.46 5.90 4.46 5.91 4.46 2.95 4.46 4.46 2.23 1. Tax depreciation is lower in the first year because assets are assumed to be in service for 6 months. 2. Real property is depreciated straight-line over 27.5 years for residential property and 39 years for nonresidential property. Year: 0 1 2 3 4 5 6 Thereafter Sales (millions of traps) 0.5 0.7 0.9 0.9 0.6 0.3 0 a. What is project NPV? (Negative 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