ACME Microsystems makes testing equipment for the microchip industry. The company is considering the purchase of a new vacuum pump on January 2, 2017. The old pump was purchased on January 2, 2013 and will be fully amortized for accounting purposes by December 31, 2016 (at the end of four years). However, the old pump can be still used for another four years (to the end of 2020). ACME Microsystems has two options: (i) continue to operate the old pump or (ii) sell the old pump and purchase the new pump. The seller of the new pump offered no trade-in. The following information has been assembled to help management decide which option is more desirable: Initial machine investment Terminal disposal value at the end of its useful life Useful life from date of acquisition Amortization method used for financial reporting purposes Estimated disposal values of machines: January 2, 2017 December 31, 2020 Capital Cost Allowance (CCA) rate Old Pump $450,000 New Pump $600,000 $ 100,000 8 years 4 years straight-line straight-line $50,000 So $100,000 40% 40% All cash flows are considered to be year-end, other than the acquisition of the new pump and the disposal of the old pump on January 2, 2017. Both pumps belong to the same asset class for tax purposes. ACME Microsystems has a 40% income tax rate and an after-tax required rate of return of 10%. ACME Microsystems can sell its entire production at a price of $4,120 per unit. The cash operating costs for ACME Microsystems consist of variable manufacturing costs of $3,300 per unit and total fixed costs of $1,200,000. Buying the new pump (i) would immediately generate efficiency cash savings of $200,000 per year; (ii) would allow ACME Microsystems to increase production by 30 units in 2017, by 50 units in 2018 and 2019, and by 70 units in 2020; and (iii) would reduce the (cash) variable manufacturing costs by $180 per unit for the additional units manufactured. Suppose that ACME Microsystems buys the new pump on January 2, 2017. The UCC balance in its asset class at the start of 2017 is $500,000. What is the maximum capital cost allowance that can be deducted from taxable income in 2017? Show your detailed CCA calculations for 2017, including the beginning and the ending balances for unamortized capital cost in the asset class