A company based in Thailand has a Vietnamese subsidiary. The subsidiary generates 215232 VND a year, received in equivalent four installments. The Thai company wishes to convert the Vietnamese Dong cash flows to Thai Baht four times a year. It plans to engage in a cross-currency swap in order to lock in the exchange rate at which it can convert the Vietnamese Dong to Thai Baht.

The current exchange rate is 803 VND/1 THB. The fixed bid and ask rates on a plain vanilla currency swap in Thai Baht is 3.0 % - 3.2 % per year, and the fixed bid and ask rates on a plain vanilla currency swap in Vietnamese Dong is 5.5 % - 5.7 % per year.

1. Is the swap cash flow in Vietnamese Dong calculated above the cash inflow to or cash outflow from the subsidiary?

2. Is the cash flow in Thai Baht calculated above the cash inflow to or cash outflow from the subsidiary?