Giant Global Construction Company is considering whether to refund a $20,000,000 20-year 7% (paid semi-annually) coupon bond that was issued five years ago. The issue costs at that time were $600,000. The call price is 104. The replacement would be a $20,000,000 15-year 5% (paid semi-annually) coupon bond issue, with underwriting (flotation) costs of $475,000. There would be a one-month overlap, with surplus funds earning 2% for that one month. The tax rate is 40%. Required: Use NPV analysis to determine whether the company should refund the bond issue. Item Calculation NPV