The company is considering replacing this bond issue to take advantage of a decrease in interest rates. The company has the ability to call each bond for a 10% premium over face value, i.e., each $1000 bond can be repurchased by the company for $1100. If a new 12-year bond issue can be made (at par) by the company at the same yield-to-maturity of 7.65%, should the company replace the bond? What is the net present value?

a. No, the company should not replace the bond. NPV is -323.48.

b. No, the company should not replace the bond. NPV is -237.64.

c. Yes, the company should replace the bond. NPV is 237.64.

d. Yes, the company should replace the bond. NPV is 323.48.