Interstate Transport has a target capital structure of 50% debt and 50% common equity. The firm is considering a new independent project that has a return of 13% and is not related to transportation. A pure-play proxy firm has been identified that is exclusively engaged in the new line of business. The proxy firm has a beta of 1.38 and a capital structure of 50% debt and 50% equity. Both firms have a marginal tax rate of 40%, and Interstates before-tax cost of debt is 12%. The risk-free rate is 10%, and the market risk premium is 5%. (a) What is the projects required return? (b) Should the firm accept or reject the project? (c) Is there a leverage ratio where the firm be indifferent between accepting and rejecting the project? Why or why not?