Describe clearly, concisely, and convincing the proposed terms of the currency swap and interest rate swap transactions. Include clearly presented supporting computations to support your proposal.

Information used to determine terms of proposed currency swap and interest rate swap transactions:
Name of foreign country into which US Company recently expanded:	United Kingdom
Name of foreign countrys currency:	Sterling Pound
Current US Dollar-foreign currency exchange rate:	$1.30
Market-projected US Dollar-foreign currency exchange rate in one year:	$1.32
Amount of foreign currency to be borrowed at current date to finance foreign operations:	10,000,000
Interest rate on foreign currency loan (repayable with interest in one year):	6		percent
Interest rate on foreign currency loan is:	Fixed:	X	Variable:
US Parent Companys capital structure policy requires financing that is:	Fixed:	X	Variable:
Projected sales of foreign country subsidiary during next year (in foreign currency):	1,000,000
Projected net profit margin of foreign country subsidiary during next year:	15.0		percent
Capital structure policy requires repatriation of foreign profit (in US Dollars):	100		percent
Amount of foreign subsidiarys investments in debt securities of that foreign government maturing in one year (stated in the foreign currency):	500,000
Fixed interest rate on one-year foreign government debt securities (above):	3.0		percent