The spot exchange rate between US dollar and Euro is $1.50/. Suppose a U.S. MNC wants to finance a 100 million capital expenditure of its German subsidiary. In the meantime, a German MNC wants to finance $150 million capital expenditure of its U.S. subsidiary. Therefore, both firms wish to finance a project in each others country of same size. Their borrowing opportunities are given in the table below.

	$
U.S. MNC	7%	9.5%
German MNC	10%	10.5%

A swap bank has arranged the following currency swap between U.S. MNC and German MNC.

(1) How much is the total saving that can be split among U.S. MNC, German MNC, and the swap bank?

(2) How much are the amount of interest paid (received) each year for U.S. MNC to various parties? How much percentage savings will U.S. MNC benefit?

(3) How much are the amount of interest paid (received) each year for German MNC to various parties? How much percentage savings will German MNC benefit?

(4) How much are the amount of interest paid (received) each year for the swap bank to various parties? How much percentage savings will the swap bank benefit?