Forn Inc. has purchased a new machine valued at $15 mln. The firm has a marginal tax rate of 45% and a WACC of 4.5%. The machine has a CCA rate of 35%.

a) Complete the CCA table for the first four years of the machines life.

Year	UCCb	CCA	UCCe
1
2
3
4

b)Assume that the firm sells the machine for its UCC at the end of year 4. What is the PVCCA associated with owning the machine?

c) Assume that this is the only asset in the CCA pool. What are the tax implications if the firm sells the machine for $2 mln at the end of year 4?

d) Assume that this is the only asset in the CCA pool. What are the tax implications if the firm sells the machine for $10 mln at the end of year 4?

e) Assume that this is the only asset in the CCA pool. What are the tax implications if the firm sells the machine for $20 mln at the end of year 4?