Blues Corp. (based in Miami) is a U.S. drug company that has attempted to capitalize on new opportunities to expand in Eastern Europe. The production costs in most Eastern European countries are very low, often less than one-fourth of the cost in Germany or Switzerland. Furthermore, there is a strong demand for drugs in Eastern Europe. Blue penetrated Eastern Europe by purchasing a 60 percent stake in Galena AS, a Czech firm that produces drugs. Blue can finance its investment in the Czech firm by borrowing dollars from a U.S. bank that would then be converted into koruna (the Czech currency) or by borrowing koruna from a local Czech bank. Blue Corp should consider which one of these statements in making the financing decision?

	the interest rate in the U.S. versus the interest rate when borrowing koruna (the Czech currency)
	the potential change in the koruna currency against the dollar.
	that if it finances the project in koruna, it could use some of its local funds to pay off its interest expenses before remitting any funds to the U.S. parent.
	all of the above.