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?