You have just started up a new company in Nova Scotia. Yourcompany produces software for the “Doctors Online” company whichprovides medical assessments and treatment recommendations viacombination of online doctor appointments and extensive screeningquestionnaires. You need to invest $200,000 immediately to purchasecomputer equipment (CCA class number 45 with a CCA rate of 45% andno salvage value). If the anticipated operating costs (excludingyour salary) are $15,000 per year increasing at 5% per year(inflation) and the anticipated revenue is $170,000 per yearincreasing at 3% per year (inflation), what constant amount can youwithdraw each year as salary over the 4 year life of the project ifyou want the company to make 14 % per year (return on yourinvestment)? For this question disregard taxation effect (tax rate= 0).

a) (2 pts) What will be the annual CCA payments for eachyear?

c) (2 pts) What will be annual costs and revenues accounting forinflation each year?

d) (2 pts) Draw the cash flow diagram with indication of allcash flows including the unknowns.

e)(4 pts) What will be your salary at the desired rate of return%?

f) If the investment is comprised of $100,000 cash and $ 100,000from a bank loan charging an effective annual interest rate of 4%with annual payments:

i) (3 pts) What will be the annual payments on the bank loan(amortized loan)? What will be the total amount of interest paid tothe bank?

ii) (4 pts) What will be your salary at the desired rate ofreturn % in this case.