Spherical Manufacturing recently spent $$10$ million to purchase some

equipment used in the manufacture of disk drives. This equipment has a

CCA rate of $45\%$ and Spherical's marginal corporate tax rate is $38\%.$

a$.$ What are the annual CCA deductions associated with this equipment for

the first five years?

b$.$ What are the annual CCA tax shields for the first five years?

c$.$ What is the present value of the first five CCA tax shields if the appropriate

discount rate is $10\%$ per year?

d$.$ What is the present value of all the CCA tax shields assuming the

equiment is never sold and the appropriate discount rate is $10\%$ per year?

e$.$ How might your answer to part $($d$)$ change if Spherical anticipates that its

marginal corporate tax rate will increase substantially over the next

five years?

a$.$ What are the annual CCA deductions associated with this equipment for

the first five years?

The CCA deduction for year $1$ is $$.($Round to the nearest dollar.$)$