Pacific Ltd is evaluating a new project. The initial investment of the project is $11 million and it will generate after-tax operating cash flow of 2 million per year for 10 years. The cost of capital for the project is 12% per year. The firm is subject to the corporate tax rate of 25%. a) Suppose the project is financed with $5 million of equity and $6 million of perpetual debt and the interest rate is 8%. What is the adjusted present value (APV) of the project? (8 points) b) How does the APV change if the firm needs to pay the flotation cost of $250,000 for new equity issuance but there is no tax shield from the flotation cost? (8 points)