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%

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