Virtual World Corp has bought a new machine at a cost of $$1,200,000.$ This machine belongs to class $8$

for CCA purpose $($CCA rate is $20\%).$

a$)$ Calculate the CCA deduction for the first three years of this machine life.

b$)$ In the first year of production, the machine will generate additional sales of $$800,000.$ Cost of

goods sold is $70\%$ of sales. Also the company is expected to increase its net working capital by

$$200,000$ in that year. If the tax rate of the company is $35\%,$ what is the company's free cash

flow for the first year?