MCC completed extensive research and development on a new gazebo; the R&D cost MMC $150,000 one year ago. MMC is now considering whether or not to proceed with production. If the company goes ahead with the project, it will require an initial investment of $700,000 in new machinery. The machinery can be placed for tax purposes in an asset-class pool with a CCA rate of 30%. It is anticipated that after five years, the project will end and the equipment will be sold to a competitor for $100,000. The company has many such pieces of equipment in the asset pool, which always has a large UCC balance. Assume the cost of capital is 10% and the corporate tax rate is 40%.

The present value of the CCA tax shield is $__________________.

The CCA tax shield in year one is $_______________.

The present value of the salvage value that should be used in the NPV analysis is $ ____________.

The present value of R&D costs that should be used in the NPV analysis is $______________.