Your firm purchased the current machine it uses to manufacture widgets 3 years ago. The machine cost $680,000 at that time. Today the machine is worth $262,000. The machine could be operated for another 10 years. 10 years from now the old machine will be worth $75,000. The old machine machine generates revenues of $655,000 per year. The old machine has operating costs of $397,000 per year. The firm has a current investment in operating net working capital of $60,000.

The firm is thinking about buying a new machine to replace the old machine. The new machine will cost $1,172,000. The new machine can be operated of 10 years. 10 years from now the new machine will have a salvage value of $135,000. The new machine will generate revenues of $924,000 per year. The new machine will have operating costs of $473,000. The new machine requires an investment in operating net working capital of $112,000.

The tax rate is 38.5%. The CCA rate is 31%. The required rate of return is 11.8%.

What is the present value of the CCA tax shield? You may assume the half year rule applies and the asset class remains open.

Your answer should be correct to two decimal places.