If the present value of the expected future cash flows represented the company market value today; what should your company be willing to pay today for the business? assumeyour company has other opportunities to invest money today andin the future at a nominal 10% interest rate compounded annually?

A$100 million interest rate swap has a remaining life of 10 months. under the terms of the swap, the six-month libor is exchanged semi-annually for 12% per annum. the six-month libor rate in swaps of all maturities is currently 10% per annum with continuous compounding. the six-month libor rate was 9.6% per annum two months ago. what is the current value of the swap to the party paying floating? what is its value to the party paying fixed?