Consider a project that will require $80,000 in fixed assets and another $20,000 in net working capital. The salvage value is 0. The project is expected to produce sales of $110,000 with associated costs of $70,000. The project has a 4-year life. Fixed assets belong to a 30% CCA class. The tax rate is 35%, and the discount rate is 10%.

1. What is the projects CCA tax shield in year 1? (10 points)
2. What is the projects after-tax operating cash flow in year 1, ignoring the CCA tax shield? (5 points)