The Bowman Corporation has a bond obligation of $$13$ million

outstanding, which it is considering refunding. Though the bonds

were initially issued at $10$ percent, the interest rates on similar

issues have declined to $8\mathrm{.}4$ percent. The bonds were originally

issued for $20$ years and have $10$ years remaining. The new issue

would be for $10$ years. There is a $9$ percent call premium on the old

issue. The underwriting cost on the new $$13,000,000$ issue is

$$430,000,$ and the underwriting cost on the old issue was $$320,000.$

The company is in a $35$ percent tax bracket, and it will use an $12$

percent discount rate to analyze the refunding decision.

Use$$Appendix D$$for an approximate answer but calculate

your final answer using the formula and financial calculator

methods.$$a$.$Calculate the present value of total

outflows.$($Do not round intermediate calculations and

round your answer to $2$ decimal places.$)$

$$

$$b$.$Calculate the present value of total

inflows.$($Do not round intermediate calculations and

round your answer to $2$ decimal places.$)$

$$

$$c$.$Calculate the net$$present

value.$($Negative amount should be indicated by a minus

sign. Do not round intermediate calculations and round your answer

to $2$ decimal places.$)$

d$.$ Should the old issue be refunded with new debt?