Show all computations.

A Inc. is an US firm and B Inc. is an European firm. A needs 10 Million Euros and B needs USD equivalent to 10 Million EUR. Current exchange rate is 1.5 USD/EUR. The cost of borrowing for each company is as follows: A can borrow in USA at 4% per annum and in Europe at 7% per annum. B can borrow in Europe at 8% and in USA at 6%. Which company has Absolute advantage in USA and Europe? Which firm has comparative advantage in USA? and in Europe? Construct an swap agreement between A and B such that both can save yearly cost of borrowing