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McDonald's is a U.S. based company. Last year, a British subsidiary of McDonald's entered into a USD 25 million 5-year cross currency interest rate swap with Jaguar Automobiles to pay British pounds and receive U.S. dollars based on the following information. | USD Bid Rate | USD Ask Rate Maturity | 5 Years Initial Spot Rate USD1.25/GBP | | GBP Bid Rate | GBP Ask Rate 5.15% 5.25% 8.85% 8.95% Note: If you have not already come across the first part of this question, save your answers because you will need them for the first part of the problem. Now, with four years remaining in the life of the swap contract, McDonald's would like to unwind the swap. Based on the following information, what is the net present value of the swap agreement? Who pays whom? How much? Maturity 4 Years Current Spot Rate USD1.10/GBP GBP Interest Rate 6.00% USD Interest Rate 8.00% McDonald's is a U.S. based company. Last year, a British subsidiary of McDonald's entered into a USD 25 million 5-year cross currency interest rate swap with Jaguar Automobiles to pay British pounds and receive U.S. dollars based on the following information. | USD Bid Rate | USD Ask Rate Maturity | 5 Years Initial Spot Rate USD1.25/GBP | | GBP Bid Rate | GBP Ask Rate 5.15% 5.25% 8.85% 8.95% Note: If you have not already come across the first part of this question, save your answers because you will need them for the first part of the problem. Now, with four years remaining in the life of the swap contract, McDonald's would like to unwind the swap. Based on the following information, what is the net present value of the swap agreement? Who pays whom? How much? Maturity 4 Years Current Spot Rate USD1.10/GBP GBP Interest Rate 6.00% USD Interest Rate 8.00%

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