What is the npv of the refunding operation

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Assume that the City of Pensacola has $10 million of 12 percent, 20-year, $1,000 par value, semiannual payment bonds outstanding that can be called at a price of $1,100 per bond. New 20-year, 10 percent semiannual payment bonds can be sold at a flotation cost of $600,000, or 6 percent. What is the NPV of the refunding operation?

Reference no: EM131185446

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