The machine has an estimated life of 3 years and costs $30,000. The machine falls under assetclass 43 and has a capital cost allowance (CCA) rate of 30.00%. At the end of 3years the machine will be scrapped as it will have a zero value. The newmachine will result in sales of $36,000 and cost of goods sold of $18,000 peryear during the life of the project. The production of this new product linewill result in working capital balances at the end of each year as follows: $0in Year 0, $2,160 in Year 1 & 2, and $0 in Year 3. Assuming ABC is in the35.00% tax bracket and has a cost of capital of 10.00%, determine the following:

What is the profit after-tax (before CCA deductions) for ABC for each year of the project?

$6,300

$11,700

$18,000

$24,300

What is the Present Value of the CCA Tax Shield?

$7,517

$7,795

$9,020

$16,537

What is the NPV of the project?

$6,272

$28,755

$36,272

$42,544