The Bowman Corporation has a bond obligation of $12 million outstanding, which it is considering refunding. Though the bonds were inntially issued at 13 percent, the interest rates on similar issues have declined to 115 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 $12,000,000 issue is $420,000, and the underwriting cost on the old issue was $310,000. The company is in a 35 percent tax bracket, and it will use an 11 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) PV of total cuts b. Calculate the present value of total inflows. (Do not round Intermediate calculations and round your answer to 2 decimal places.) PV of total outflows 7 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.) Net present value d. Should the old issue be refunded with new debt? Yes No