1. Suppose Vermont Electronics Company is thinking about relocating its plant to Mexico where labor costs are lower. In the hope that it can stay in Vermont, the company has submitted an application to the State of Vermont to issue $2 million in five-year, tax-exempt industrial bonds. The coupon rate on industrial revenue bonds in Vermont is currently 5 percent. This is an attractive rate because the normal cost of debt capital for Vermont Electronics Company is 10 percent. What is the NPV of this potential financing transaction?