b$)$ Over the last two years, GPS Inc. incurred a cost of $$100,000$ for conducting a feasibility study on a new project. The project requires purchasing a new machine that will cost $$2,200,000$ plus an additional $$300,000$ in installation costs. Management estimates that the firm will obtain annual operating revenues before taxes of $$910,000$ and incur annual operating expenses before taxes of $$400,000$ over the economic life of the project. The specifications of this machine indicate an economic life of ten years and management estimates that at the end of the economic life, the machine will have a salvage value of $$200,000.$ This machine is in asset class $8$ which has a CCA rate of $20\%.$ The asset class is expected to remain open at the end of the project.

Calculate the following: the weighted average flotation cost, initial investment $($amount needed$),$ amount raised, flotation costs $($in $$),$ annual tax shield associated with flotation costs, present value of annual tax shield associated with flotation costs, present value of the after$-$tax operating cash flows, present value of salvage value, and present value of CCA tax shield.

Based on NPV analysis, should the project be undertaken? Assume this project will have the same level of risk as the firm. Show your work.$(31$ marks$)$

c$)$ How would your answers to question $($b$)$ change if the firm had no internally generated funds? Explain.$$