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Question 3: (15 marks) Nosal Corp. is evaluating a potential investment project. The initial cost of the project is $1 million. Nosal's cost of unlevered equity is 15%. The firm faces a corporate tax rate of 40%. The project will generate EBIT of $250,000 per year for the next 12 years. (Assume that these cash flows occur at the end of each year.) (a) What is the NPV of the project, assuming all-equity financing (b) Suppose that Nosal Corp. can fund the project entirely with a non-amortizing loan at the market interest rate of 6% (before tax). The loan will last for 7 years. The loan will result in flotation costs of $20,500, which can be amortized over the 7 year life of the loan. What is the APV of the project