Question: Refer to Practice 19-1 and Practice 19-2. What would be the impact on the companys total cash payment in Year 2 if the pay-fixed, receive-variable

Refer to Practice 19-1 and Practice 19-2. What would be the impact on the company’s total cash payment in Year 2 if the pay-fixed, receive-variable interest rate swap had been based on a loan amount of $300,000 instead of $100,000? In other words, what would be the company’s total cash payment in Year 2 if the variable-rate loan is $100,000 but the interest rate swap is for a $300,000 loan and the January 1 of Year 2 prime lending rate is

(1) 7%,

(2) 15%, and

(3) 10%? Comment on your computations.

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