Encore Ltd, purchased new machinery worth $560,000. The machine will allow the company to increase production by 63,100 units per year at $53 per unit. Variable costs per unit are twenty-nine dollars and the fixed costs per year are $300,000. The machinery is valued to be worth $19,000 after 9 years. Depreciation using the straight-line method. The required rate of return on the project using this machinery is 8% and a marginal tax rate of 34% is applicable to the company.

(a) Develop the Pro-Forma Statement of Comprehensive Income for the next year.

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