CB Solutions. Heather O'Reilly, the treasurer of CB Solutions, believes interest rates are going to rise, so she wants to swap her future floating-rate interest payments for fixed rates. Presently, she is paying per annum on $5,200,000 of debt for the next two years, with payments due semiannually. LIBOR is currently 3.988% per annum. Spread paid over LIBOR, per annum is 2.000%. Heather has just made an interest payment today, so the next payment is due six months from now. Heather finds that she can swap her current floating-rate payments for fixed payments of 7.004% per annum. (CB Solutions' weighted average cost of capital is 12%, which Heather calculates to be 6% per 6-month period, compounded semiannually). a. If LIBOR rises at the rate of 50 basis points per 6-month period, starting tomorrow, how much does Heather save or cost her company by making this swap? b. If LIBOR falls at the rate of 25 basis points per 6-month period, starting tomorrow, how much does Heather save or cost her company by making this swap? a. If LIBOR rises at the rate of 50 basis points per 6-month period, starting tomorrow, how much does Heather save or cost her company by making this swap? The swap for the first six-month period is $. (Select from the drop-down menu and round to the nearest dollar.)

CB Solutions. Heather O'Reilly, the treasurer of CB Solutions, believes interest rates are going to rise, so she wants to swap her future floating-rate interest payments for fixed rates Presently, she is paying per annum on $5,000,000 of debt for the next two years, with payments due semiannually. LIBOR is currently 3 984% per annum Spread paid over LIBOR, per annum is 2.000 % Heather has just made an interest payment today, so the next payment is due six months from now Heather finds that she can swap her current floating-rate payments for fixed payments of 7.004% per annum (CB Solutions weighted average cost of capital is 12%, which Heather calculates to be 6% per 6-month period, compounded semiannually). a. If LIBOR rises at the rate of 50 basis points per 6-month period, starting tomorrow, how much does Heather save or cost her company by making this swap? b. If LIBOR falls at the rate of 25 basis points per 6-month period, starting tomorrow, how much does Heather save or cost her…

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Van Buren Resources Inc. is considering borrowing $90,000 for 175 days from its bank. Van Buren will pay $3,000 of interest at maturity, and it will repay the $90,000 of principal at maturity. Assume that there are 365 days per year. Calculate the loan’s annual financing cost. Round your answer to two decimal places.   % Calculate the loan’s annual percentage rate. Round your answer to two decimal places.   % What is the reason for the difference in your answers to Parts a and b? The  does not consider compounding effects.