When calculating net present value for a bond refunding calculation, all of the following are considered either outflows are inflows EXCEPT:

Question

Quizplus · Accepted Answer

Cost savings with the new interest rates (inflow), net cost of underwriting expense on new issue (outflow), and net cost of call premium (outflow) are all considered in the net present value calculation for a bond refunding analysis. However, the net loss from underwriting cost on the old issue is not considered in the calculation.

When Calculating Net Present Value for a Bond Refunding Calculation