Five years ago, NWA issued $50,000,000 face value of 30-year bonds carrying a 14% annual payment coupon. NWA is now considering refunding these bonds. It has been amortizing $3 million of flotation costs on these bonds over their 30-year life. The company could sell a new issue of 25-year bonds at an annual interest rate of 11.67% in today's market. A call premium of 14% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. NWA's marginal tax rate is 40%. The new bonds would be issued when the old bonds are called (no overlapping interest). Should the firm refund the bonds? Why? Show all steps and formulas.