Suncor can buy a new, very efficient, wind turbine machine for $20 million. It will cost $350,000 per year to operate but will save Suncor $3,000,000 annually in operating expense and will be useful for 10 years. The turbine will have a salvage value of $3,000,000 at the end of 10 years. Suncor's discount rate is 10% and their tax rate is 20%. The machine falls into a 25% CCA asset class, declining balance method, and the half-year rule applies (the asset was purchased before 2018).

1.What is the present value of the project's after-tax cash flows from operations (excluding the present value of the CCA tax shields) over the project's life?

a.11,125,984

b.13,026,482

c.14,329,130

d.16,283,103

e.20,000,000

2.What is the present value of the CCA tax shields over the project's life?

a.2,105,451

b.2,310,040

c.2,562,040

d.2,727,272

e.2,821,780

3.What is the NPV of purchasing the new machine?

a.-4,411,478

b.-3,254,848

c.0

d.3,254,848

e.4,411,478