Use the table for thequestion(s) below.

Year 0 Year 1 Year 2 Year 3

Revenues 400,000 400,000 400,000

Cost of Goods Sold 140,000 140,000 140,000

=EBIT 260,000 260,000 260,000

Taxes (35%) 91,000 91,000 91,000

=Unlevered net income 169,000 169,000 169,000

Additions to Net 11,000 11,000 11,000

Working Capital

Capital Expenditures 300,000

=Free Cash Fow 158,000 158,000 158,000

VisbyRides, a livery carcompany, is considering buying some new luxury cars. After extensiveresearch, they come up with the above estimates of free cash flow from this project. The cars belong to asset class 10 and have a capital cost allowance(CCA) rate of30%. The cars will be sold at the end of 3 years for $150,000. What is the present value of the lost CCA tax shields of theproject, given that the cost of capital is10%, and the company faces a marginal tax rate of25%?