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Luvia and Paraguas. Llivia Manufacturing and Paraguas Products both seok tunding at the lowest possible cost Lluvia would prefer: the llexibilty of floating-rate borrowing. while Paraguas wants the security of fixed-rate borrowing L Wivia is the more creditworthy company. They face the following rate structure. Luvia, with the better credit rating, has lower borrowing costs in both types of borrowing Lluvia wants floating-rate debt so it could borrow at LBOR + 1.000%. However, it could borrow fixed at 9.500% and swap for floating-rate dobt Paraguas wants fixed-rate dobl, so it could borrow foxed at 13500%. However, it could borrow floating at LIBOR +2.000% and swap for foxed-rate debt What should they do? (LIBOR is 6500% ) Lluvia's comparative advantage is (Round to three decimat places ) Wuvia's net interest atter a swap with Raraguas is os (Round to three decimal places. Paraguas's net interest atter a swap with Lluva is oi (Round to three decimal places: Lluvi''s savngs on borrowng versus net swap is \% (Round to three decimal places:) Paraguas's savings on borrowing versus net swap is fogsing Therefore; Livia sisould borrow at the late and Paraguas should borrow at the fate (Select from the drop-down menus:)