MNO Corporation has a $15 million bond obligation outstanding, which it is considering refunding. Though the bonds were initially issued at 10.5 percent, the interest rates on similar issues have declined to 8.0 percent. The bonds were originally issued for 20 years and have 12 years remaining. The new issue would be for 12 years. There is an 11 percent call premium on the old issue. The underwriting cost on the new $15 million issue is $200,000. The company will allow an overlap period of one month (1/12 of the year). The present value of these other costs is $232,580. MNO is in a 25% tax bracket. 1 What is the present value of the total costs/outflows? 2. What is the present value of the benefits/inflows? 3 What is the net present value of this refunding decision? 4. Trie or false Based on net present value, MNO should refund the issue. True