C. JIM's can its $150M in bonds - maturing in 7 years and paying a fixed 3.45% - for the same amount paying a floating rate of the Bloomberg Short Term Bank Yield Index + 1.40%. You are asked to show the cash flows for the fixed and floating scenarios and the net difference each year plus the net overall difference undiscounted and discounted using a 4% discount rate. Show all fixed and floating payments as negative cash flows. Net benefits use the formula: floating payments minus fixed payments. State whether the swap is better or worse in the space provided. c. Interest Rate Swap Cash Flows Bond outstanding 150 Fixed Floating Net Maturity (yrs.) 7 Year 1 Fixed rate 3.5% Year 2 Spread over BSTBY 1.40% Year 3 BSTBY: Year 4 Years 1-2 1.5% Year 5 Years 3-4 2.1% Year 6 Years 5-7 2.5% Year 7 Undiscounted Net Discounted Net