The Marcos Company issued $20 million of 20-year, $1,000 par value bonds with a coupon rate of 9% ten years ago. The bonds with a call price of $1,060 were sold at a discount of $40 per bond. The initial flotation cost was $50,000. The company wishes to sell a $20 million new issue of 8%, 10-year bonds in order to retire its existing bonds. The company intends to sell its new bonds at their face value of $1,000 per bond. The flotation costs of the new issue are estimated to be $90,000. The companys marginal tax rate is 40% and the new bonds are sold three months before the old bonds are called.

What is the net cash outflow at time 0?

What is the annual net cash outflow (ANCO) of the old bonds?

What is the refunding projects NPV?