Hello,

Could some one please show me how to solve this step by step:

Your firm is thinking about purchasing a new machine. The new machine would cost $4,500,000

today. The new machine would operate for 4 years at which time it could be sold for $900,000.

The CCA rate is 30%. The asset class will remain open. The new machine will generate revenues

of $1,750,000 per year. The annual operating costs associated with the new machine are

$1,100,000 per year. The corporate tax rate is 45%. The required rate of return is 9.

what is the present value of the CCA tax shield? Be certain to include any necessary

adjustments due to salvage value.

A)$1,272,682.21

B)$1,336,990.61

C)$1,493,383.91

D)$1,246,153.85

E)$1,181,845.45

Answer is A