AllStar Inc. is considering a project which requires the purchase of a $160,000 machine. The CCA rate is 30%. When the project ends at year 7, its residual value is expected to be $18,000. The UCC of the asset class will continue to be positive. The project is expected to generate before tax cash flow of $35,000 per year for 7 years. If the project is all financed by equity, the cost of capital would be 10%. The corporate tax rate is 35%. AllStar only has $70,000 available. Since the project will increase employment in local community, DT bank is willing to provide a loan at a subsidized rate of 3% which is 2% lower than the market rate. However, the bank will charge 8% of the amount borrowed as flotation costs and require AllStar to repay one third of the loan at years 3, 5, and 7. Using the adjusted present value method, determine whether AllStar should undertake the project.