Name: MGMT 261 - Corporate Finance II In Class Assignment - Chapter 10A Milli's Vanilla Ice Cream Shop has placed a $100,000 non-refundable deposit on a new venture. The deposit can be expensed immediately. The deposit provides Milli's with access to information of the trade secret variety and allows Milli's the option to purchase a unique ice cream manufacturing machine for an additional $500,000. The machine is designed to produce a new ice cream product. From the information revealed, it is projected that the expected life of the machine is nine years. At that time, the machine could be salvaged for an estimated $20,000. A preventative maintenance expenditure of $100,000 is anticipated in five years. Projected annual cash flows before taxes for the new venture is $175,000. Given the capacity of the machine, it will be necessary to increase raw material inventories by $10,000, which will be partially financed by S4,000 in increased accounts payable. If purchased, this machine will join the ongoing Class 8 pool with a CCA rate of 20%. Milli's corporate tax rate is 39%, and its cost of capital is 15% Should Milli's Vanilla Ice Cream Shop proceed with the new venture and the equipment purchase? Provide all calculations necessary to support your recommendation