5. A firm has entered into a 4-year, annual-pay, 6% plain vanilla interest rate swap with a notional principal value of $10,000,000. The firm is the fixed rate payer (i.e. the swap dealer is the floating rate payer) and the following spot rates are observed and expected over the next three years:

1-year LIBOR today = 5%.

Expected 1-year LIBOR in a year = 6%.

Expected 1-year LIBOR in two years = 7%.

Based solely on this information, what would be (A) the first net payment amount and (B) the direction (e.g. from the firm to the swap dealer or vice versa)?