Cogeco Communications is deciding whether to purchase some new fibre optic cable (Class 42, rate 12%) at $20,000. Fibre optic cable has no salvage value. The company is currently in a 24% tax rate and has a cost of capital of 8%. Its Class 42 asset pool is currently $75,000 (before the new purchase). Assuming management decides to purchase the new cable, answer the following questions: 

1. In the current year, what is the maximum allowable CCA with respect to Class 42 assets?

2. What is the PV of the CCA tax shield for the Class 42 assets? 

3. How is the PV of the CCA tax shield relevant to the purchase decision?