Paragraph C: Suppose we are thinking about replacing an old machine with a new one. The old one cost us $1,300,000 one year ago; the new one will cost $1,560,000. The new machine will be in CCA class 10 (30%). It will probably be worth about $300,000 after five years. The old machine belongs to CCA class 10 (30%). If we don't replace it now, we will have to replace it in two years. We can sell it now for $420,000; in two years, it will probably be worth $120,000. The new machine will save us $290,000 per year in maintenance costs. The tax rate is 38% and the discount rate is 12%. 8. Refer to paragraph C. What is the new machines PV of CCA tax shield? a) $354,540.14 b) $414,195.17 c) $483,420.83 d) $502,278.10 9. Refer to paragraph C. What is the old machines PV of CCA tax shield? a) $216,041.68 b) $273,962.83 c) $331,075.50 d) $428,943.43