14-20. Suppose the Builders-R-Us Real Estate Finance Corporation has $60 million worth of bonds outstanding with an annual coupon interest rate of 8 percent. However, market interest rates have fallen to 6 percent since the bonds were issued 10 years ago. Accordingly, Builders-R-Us would like to replace the old 8 percent bonds with a new issue of 6 percent bonds. The relevant nancial data are summarized here: Old Bond Issue $60,000,000, 8% annual interest rate,interest paid semiannually, 20 years original maturity, 10 years remaining to maturity Call Premium on Old Bond 4% Underwriting Costs on Old Bonds When Issued 5 Years Ago 2% of amount issued New Bond Issue $60,000,000, 6% annual interest rate, interest paid semiannually, 10 years to maturity Underwriting Costs on New Bonds 3% of amount issued Marginal Tax Rate 40% Discount Rate for Present Value Analysis (After-Tax Cost of Debt) 3.6% The Builders-RUs Corporation will be issuing new bonds having the same maturity as the number of years remaining to maturity on the old bonds. a. What are the total cash outows that Builders-R-Us will incur at time zero if the company implements the proposed bond refunding program? I). What is the annual before-tax savings in interest payments that Builders- RUs would realize? c. What is the annual after-tax savings in interest payments that Builders-R- Us would realize? (I. What is the present value of the annual after-tax interest savings? e. What are the annual tax savings on the call premium that will be paid in the refunding program? 1'. What is the present value of the annual tax savings on the call premium? g. What are the net tax savings from writing off the balance of the old bond underwriting costs? h. What are the tax savings from the new bond underwriting costs? i. What is the present value of the tax savings from the new bond underwriting costs