Excel Online Structured Activity: Refunding Analysis Mullet Technologies is considering whether or not to refund a $100 million, 14% coupon, 30- year bond issue that was sold 5 years ago. It is amortizing $4 million of flotation costs on the 14% bonds over the issue's 30-year life. Mullet's investment banks have indicated that the company could sell a new 25-year issue at an interest rate of 11% in today's market. Neither they nor Mullet's management anticipate that interest rates will fall below 11% any time soon, but there is a chance that rates will increase. A call premium of 10% would be required to retire the old bonds, and flotation costs on the new issue would amount to $3 million. Mullet's marginal federal-plus-state tax rate is 30%. The new bonds would be issued 1 month before the old bonds are called, with the proceeds being invested in short-term government securities returning 5% annually during the interim period. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet Conduct a complete bond refunding analysis. What is the bond refunding's NPV? Do not round intermediate calculations. Round your answer to the nearest dollar, THE THE TILL . ... HL A B D 1 Refunding Analysis 2 $100,000,000 14% 30 5 $4,000,000 10% 6 $100,000,000 11% 25 $3,000,000 3 Existing bond issue 4 Coupon rate on existing bond issue 5 Original maturity (in years) of existing bond issue Years since existing bond issue sold 7 Original flotation cost on existing bond issue 8 Call premium (%) on existing bond issue 9 10 New bond issue 11 Coupon rate on new bond issue 12 Maturity (in years) of new bond issue 13 Flotation cost on new bond issue 14 15 Tax rate 16 Interest rate on short-term government securities 17 Number of months new bonds issued before old bonds called 19 Investment Outlay (After Taxes): 20 Call premium on old bond issue 21 Flotation cost on new bond issue 22 Tax savings on old bond issue flotation cost expense 23 Additional interest on old bond issue 24 Interest earned on short-term government securities 25 Total after-tax investment 26 27 Annual Flotation Cost Tax Effects: Annual tavoinne Annoncere fintation rete A Sheet1 + 30% 5% 1 18 Formulas #N/A #N/A #N/A #N/A #N/A #N/A 2R D #N/A #NIA #NIA #NIA 25 Total after-tax investment 26 27 Annual Flotation Cost Tax Effects: 28 Annual tax savings on new issue flotation costs 29 Annual lost tax savings from old issue flotation costs 30 Net flotation cost tax savings 31 32 Annual Interest Savings Due to Refunding: 33 Annual interest on old bond issue 34 Annual interest on new bond issue 35 Net interest savings 36 37 Annual cash flows (flotation cost and interest savings) 38 39 NPV of bond refunding decision 40 41 42 43 #N/A #N/A #N/A #N/A #N/A