Problem $18-6$ NPV of Loans

The CFO of Kendrick Enterprises, is evaluating a $10-$year, $6\mathrm{.}2$ percent loan with gross proceeds of $$5,000,000.$ The interest payments on the loan will be made annually. Flotation costs are estimated to be $2\mathrm{.}5$ percent of gross proceeds and will be amortized using a straight$-$line schedule over the $10-$year life of the loan. The company has a tax rate of $24$ percent and the loan will not increase the risk of financial distress for the company.

a$.$ Calculate the net present value of the loan excluding flotation costs. $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ Calculate the net present value of the loan including flotation costs. $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$\backslash$table$[[$a$.$ Net present value$],[$b$.$ Net present value$]]$