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Why they have not considered inflation while calculating annual income of 600?
The government required that it should make an annual income of $600 million per year. There is no mention of them requiring it to increase.
I have not understood swap part in question is there any alternative working to it
With regard to the swap, my answer to your other question on swaps should enable you to do the same approach for Buryecs (and I assume you have watched my lecture on swaps).
As far as the gain or loss on the swap is concerned, the instructions in the question relating to the swap means that the principal of 5,000 will be converted in 3 years time at todays spot rate of 0.1430 whereas if that had not been in the agreement it would have been converted at the rate in 3 years time which is 0.1315. Therefore the gain is the difference between converting at the two rates, discount for 3 years.
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