RoxyInternationa is considering retiring a $280 millionbond issue sold to the public 15 years ago. The original maturity was 25 years.If the bonds were initially sold at 98,then what is the after-tax cash flow effect, today, of the accelerated amortization if Roxy is in the 35% marginal tax bracket?

a.

$224,000

b.

$1,960,000

c.

$784,000

d.

$78,400

ANS:C