Aqua Ltd. purchased new machinery worth $850,000. The salvage value of the machinery is $92,000 after 8 years.

The machine will allow the company to increase production by 72,000 units per year at $44 per unit. Variable costs per unit are $21 and the fixed costs per year are $210,000.

The required rate of return on the project using this machinery is 14% and a marginal tax rate of 52% is applicable to the company.

(a) Calculate the depreciation value per year of the machinery using the straight-line depreciation method. (2 points)

(b) Develop the Pro-Forma Statement of Comprehensive Income for the next year. (6 points)

(c) If the CCA rate applicable on the machinery is 25%, compute the present value of the CCA tax shield for the machinery. (4 points)