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Please show calculation and explain if able. Johnson Industries is currently paying a variable rate of LIBOR+3% on a loan and desires greater certainty with

Please show calculation and explain if able.

Johnson Industries is currently paying a variable rate of LIBOR+3% on a loan and desires greater certainty with regard to their loan payments. Refinancing is currently not available, so Johnson Industries decide to pursue an interest rate swap agreement. The swap terms are LIBOR for 4%.

a) What is Johnson Industries after swap loan cost?

b) Is it variable or fixed?

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