Refunding Analysis. Mullet technologies is considering whether or not to refund:

eBook roblem 18-07 efunding Analysis ulet Technologies is considering whether or not to refund a $125 million, 13% coupon, 30-year bond issue that was sold 5 years ago It is amortizing $3 million of flotation costs on the 13% bonds over he issues 30-year lfe. Mullet's investment banks have ndicated that the company could sell a new 25-year issue at an interest rate of 10% in today's market. Neither they nor Mnet's management ntcipate that interest rates will fall below 10% any time soon, but there is a chance that rates will increase. cal premium of 10% would be required to retire the old bonds, and notation costs on the new issue would amount to S3 million. Mullet's marginal federal glus state tax rate is 40%. The new bonds ould be ssued 1 month before the old bonds are caled, with the proceeds being invested in short-term government securities returning 7% annual y during the interm, pero a. Conduct a complete bond refunding analysis. What is the bond refunding's NP? Do not round intermediate calculations. Round your answer to the nearest cent