Eight years ago, the YTK Corporation issued $$41$ million of bonds, offering a coupon rate of $12\mathrm{.}50$ percent. Interest rates have fallen to $10\mathrm{.}150$ percent. Mr$.$ Jacob, the Vice$-$President of Finance, would like to take advantage of the falling rate by refunding the existing bond with a new issue of equal amount and similar duration. The bonds have sixteen years left to maturity. The Corporation has a tax rate of $26$ percent. The underwriting cost on the old issue was $3\mathrm{.}90$ percent of the total bond value. The underwriting cost on the new issue will be $2\mathrm{.}80$ percent of the total bond value. The original bond indenture contained five$-$year protection against a call, with a $10$ percent call premium starting in the sixth year and scheduled to decline by one$-$quarter percent each year after that. Assume the discount rate equals the after$-$tax cost of new debt.

A$.$ Compute the discount rate.

B$.$ Calculate the present value of the total outflows.

Calculate the present value of the total inflows.

D$.$ Calculate the net present value if the bond is refinanced.

E$.$ Based on your analyses, discuss if recalling the old bond is an appropriate strategy for the company.