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Denim Industries can borrow its needed financing for expansion using one of two foreign lending facilities. It can borrow at a nominal annual interest rate
Denim Industries can borrow its needed financing for expansion using one of two foreign lending facilities. It can borrow at a nominal annual interest rate of
88%
in Mexican pesos or it can borrow at
55%
in Canadian dollars. If the peso is expected to depreciate by
11.9511.95%
and the Canadian dollar is expected to appreciate by
66%,
which loan has the lower effective annual interest rate?
The effective annual interest rate of the loan in Mexican pesos is
nothing%.
(Round to two decimal places.)
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