TerraCorp is about to open up a new branch in Lincoln. It will cost $$35M$ today to set up$,$ and will result in $$9M$ in EBIT per year for the next $8$ years, starting one year from today. TerraCorp is going to borrow $$20M$ of the startup costs for $8$ years, at a rate of $3\mathrm{.}2\%.$ EarthCo, a firm with very similar operations, has a levered cost of equity of $15\%,$ a debt$-$to$-$equity ratio of $2,$ and a cost of debt of $6\%.$ The corporate tax rate is $25\%.$

a$.$ What is TerraCorp's cost of unlevered equity? $(10$ points$)$

b$.$ What is the present value of the tax shield from TerraCorp's debt? $(5$ points$)$

c$.$ What is the APV value of this project? $(5$ points$)$