APV ( adjusted present value) question strayer

hi sir
can you please help me out

i am trying to understand the logic behind the APV

step 1: is to calculate the base case NPV

we assume that the $25 m will be raised through 100% equity finance

but when it says to calculate the issue costs it says in the question that issue cost is 4% of the equity finance

it only took 10m x 4% = $ 0.40m

so we are assuming that the issue cost is included in the equity finance of $10m

so we need to remove the issue cost in the $10m and the issue cost in the $5m debt finance because the issue cost will change if we borrow more equity finance

why was it not removed

if the issue cost was not included you would have calculated it differently
ie: 10m x 100/96 = 10.4166m

but clearly in the $10m it was included

so that means the total amount to be raised via equity finance in the base case NPV cannot be $25m

because the issue costs of both the equity and debt finance is included

can you please help me out. maybe i am wrongly understanding something

thank you very much