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(c) Amaris Corporation and Pendilor Corporation enter into 5 years currency swap of USD 2 million to finance a project in each other's country of

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(c) Amaris Corporation and Pendilor Corporation enter into 5 years currency swap of USD 2 million to finance a project in each other's country of the same size. Below are the details of the swap: Country Interest rate Spot exchange rate Amaris Pendilor United States Europe 3.5 percent 4.2 percent EUR / USD = 1.25 i. Calculate the interest amount that each firm needs to serve at the end of the year. (4 marks) 1. Assume the exchange rate after 1 year is EUR/USD = 1.33, calculate the amount that Amaris Corporation and Pendilor Corporation need to pay in dollar terms. (4 marks)

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