Please fill the boxes below. Those are the answers needed. Thank you.

3. The CEO considers the investment in South Africa by entering into an agreement with Electo Co. to expand the existing plant by investing ZAR120, 000,000. The CEO believes MidTech should borrow the funds in US$ at a fixed rate from a bank in the U.S.A. and convert it into ZAR for investment. For this purpose a 5 year (60 month) currency swap transaction will be required. He wants to be provided with a 5 year currency swap proposal. Also depict the swap graphically for the CEO to see how the swap will work. Relevant information, that you will require are provided below:

Exchange rates:	Spot
	Bid	Ask
$/JPY	0.0094	0.0095
$/Won	0.0006	0.0008
$/CAD	0.7614	0.7616
$/GBP	1.3034	1.3038
$/AU$	0.7225	0.7226
$/ZAR	0.0606	0.0607

Current borrowing interest rates on loans:	Fixed	Libor
USA	0.640%	0.130%
Japan	0.525%	0.015%
South Korea	1.164%	0.654%
Canada	0.666%	0.156%
UK	0.577%	0.067%
Australia	0.612%	0.102%
South Africa	5.045%	4.535%

BANK CURRENCY SWAP INTEREST RATE QUOTES AGAINST U.S. LIBOR RATE
	$		Yen		Won		CAD$		GBP		AU$		ZAR
Years	Bid%	Ask%	Bid%	Ask%	Bid%	Ask%	Bid%	Ask%	Bid%	Ask%	Bid%	Ask%	Bid%	Ask%
1	0.630	0.650	0.515	0.535	1.154	1.174	0.656	0.676	0.567	0.587	0.602	0.622	5.035	5.055
2	0.640	0.660	0.525	0.545	1.164	1.184	0.666	0.686	0.577	0.597	0.612	0.632	5.045	5.065
3	0.650	0.670	0.535	0.555	1.174	1.194	0.676	0.696	0.587	0.607	0.622	0.642	5.055	5.075
4	0.660	0.680	0.545	0.565	1.184	1.204	0.686	0.706	0.597	0.617	0.632	0.652	5.065	5.085
5	0.670	0.690	0.555	0.575	1.194	1.214	0.696	0.716	0.607	0.627	0.642	0.662	5.075	5.095
6	0.680	0.700	0.565	0.585	1.204	1.224	0.706	0.726	0.617	0.637	0.652	0.672	5.085	5.105
7	0.690	0.710	0.575	0.595	1.214	1.234	0.716	0.736	0.627	0.647	0.662	0.682	5.095	5.115
8	0.700	0.720	0.585	0.605	1.224	1.244	0.726	0.746	0.637	0.657	0.672	0.692	5.105	5.125
9	0.710	0.730	0.595	0.615	1.234	1.254	0.736	0.756	0.647	0.667	0.682	0.702	5.115	5.135
10	0.720	0.740	0.605	0.625	1.244	1.264	0.746	0.766	0.657	0.677	0.692	0.712	5.125	5.145

Other summarised information:
United Kingdom subsidiary profits generated quarterly:	500,000
Estimated 30% share profit in South African plant per month:	R2,000,000
Capital cost of new electric tool plant in South Africa:	R150,000,000
Capital cost of expanding existing plant in South Africa to electronic component manufacturing and electric tool manufacturing:	R120,000,000

Workings:

	Show the figures that should be applied in this column	Marks
ZAR to be invested:		1 mark
Spot exchange rate to purchase ZAR for investment:		1 mark
Borrowing rate in U.S.A. to be used:		1 mark
Value in US$ to be borrowed:		1 mark

Swap transaction:	In which currency is the swap payment? e.g. in US$ or ZAR	State whether the payment is Fixed or Libor	State the percentage (%) of the payment	Marks
MidTech pays swap bank				1 mark
MidTech pays swap bank				1 mark
MidTech receives from swap bank				1 mark
MidTech receives from swap bank				1 mark