The Bowman Corporation has an $$12$ million bond obligation outstanding that it is considering refunding. Though the bonds were initially issued at $13$ percent, the interest rates on similar issues have declined to $11\mathrm{.}5$ percent. The bonds were originally issued for $20$ years and have $10$ years remaining. The new issue would be for $10$ years. There is a $9$ percent call premium on the old issue. The underwriting cost on the new $$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

b$.$ Calculate the Present Value of total inflows

c$.$ Calculate the Net Present Value.

d$.$ Should the old issue be refunded with new debt?