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Hi, I need help to double check my answer. The question is: In the context of 'Vision 2028', the new management is considering building a

Hi, I need help to double check my answer. The question is:

In the context of 'Vision 2028', the new management is considering building a new factory in South Korea. The Korean subsidiary will require an initial investment of 200,000m South Korean Won (KRW). Jasmine can borrow money to finance this investment in the UK market, in France, or in South Korea. Appendix Q3 offers information about the borrowing costs in different currencies and an estimation of the future value of FX. Advise which is the best way to finance the Korean factory.

Initial investment (KRW)

200,000

Interest rate in UK (5-year loan)

0.09

Interest rate in South Korea (5-year loan)

0.15

Interest rate in France (5-year loan)

0.12

Spot exchange rate: KRW per GBP

2,000.00

Expected appreciation of GBP in relation to KRW

4% per annum

Spot exchange rate: EUR per GBP

1.18

Expected appreciation of GBP in relation to EUR

3% per annum

What is the most convenient loan? Really appreciate if you can show me the working or at least the total payment for each loan and how you make the comparison.

Thank you

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