PLEASE ONLY SOLVE QUESTION 4 AND SHOW ME THE CALCULATION STEPS? WHY DO WE HAVE TO FIND THE DEPRECIATION FOR EACH YEAR SEPERATELY? ISN'T IS POSSIBLE TO USE THE PRESENT VALUE OF CCA TAX SHIELD TO FIND THE TOTAL TAX SHIELD AMOUNT??

THANKS, ANSWER IS B

A high-tech machine that produces watch bands costs $849,000. This cost could be depreciated at 30% per year (CCA Class 10). The machine would be worth $175,000 in five years. There are no capital gains to worry about. The new machine would save the firm $262,000 per year before taxes in operating costs. There is no impact on net working capital. The firm's WACC is 15% and the corporate tax rate is 40%. 3. What is the total present value of the after-tax operating cost savings that the machine will bring? A) $786,148 B) $878,265 C) $606,003 D) $611,453 E) $526,959 4. Pretend that your answer to the previous question is $600,000. What would be the NPV of purchasing this system? A) $37,892 B) $26,439 C) $304,704 D) $32,442 E) $71,124