BONUS - You calculation may differ due to rounding. Choose the closest to your calculated answer. You have decided to advance refund $10,000,000 of outstanding debt that is callable in 5 years. The interest rate on these bonds is 8%. You can issue new bonds at 6%. At the time of call on the old bonds, you will incur a 3% call premium. Interest payments on the present issue are $800,000 per year with no scheduled principal payments. Money placed in escrow to defease the original bonds can be invested in government securities at 4%. How much money from the new bond issue needs to be put into escrow to realize defeasance of the original issue? $10,204,175 $12,027,307 $11,066,650 $12,548,636 Question 20 (5 points) Zero - Based budgeting means: Determining avoidable costs by assuming volume in a program is zero Looking in detail at a few specific expenditures to see what can be eliminated A process of periodically reevaluating all programs and their associated expenditures Deciding to not budget for an item