A grocery store owner in Vancouver, British Columbia, Mr. Specterhas been very successful for over 35 years. Mr.Specteris considering a neglected ice cream store that has been up for salein Metro Vancouver.Mr. Specterasked for you to review this as a consultant.Mr. Specterprovided you with the following information. A replacement ice cream machine is worth $500,000 with expected life is 5 years. new ice cream machine will rejuvenate the store;however, the store will take time to improve its sales.Sales after first year acquisition is 100,000ice creams/year with 10% increase year over year. The ice cream at Earnest is at $5/ ice cream. Ice cream priceis expected to rise by 1.5% per yeardue to inflation.In terms of cost variable cost is expected to be 35% of the price,the cost is expected to increase by inflation as noted above. Mr. Specterwill require a new employee to run the store. Thesalary is minimum wage per hour for 40 hours a week, these are also expected to increase by inflation.Given that the ice cream store will requiremarketing, digital marketing company has quoted $10,000/ yearexpected to increase by inflation.Mr. Specterdoes not have a return on a similar risk investment and is asking for your advice. Here is Mr.Specters expectation from the consulting contract,

1.Find a discount rate for Mr. Specterbased on current interest rates and risk of the project.Explain your findings and rationale for the discount rate.

2.Assess the project/acquisition to calculate NPV, IRR, and Payback Period

3.Advice Mr. Specteron your analysis.

Format(2,000 Words)

1.Discount Rateexplain your calculations of for discount rate and rationale.(500 words)

2.Calculation and analysis of NPV, IRR and Payback Period.(500 words)

3.Summarize the above and write your analysis to provide key insights and advice Mr. Specterif you recommend him to if he should buy the ice cream store or not.(1,000 words)