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McDougan Associates, a U. S. based partnership bortoes $90,000,000 at a te when the exchange rate is $1.3402. The entire principal is to be repaid
McDougan Associates, a U. S. based partnership bortoes $90,000,000 at a te when the exchange rate is $1.3402. The entire principal is to be repaid in three years , and interest is 6.450% per annum, paid annually in euros. The euro is expected to depreciate vis a vis the dollar at 2.5% per annum. What is the effective cost of this loan for McDougan?
Complete the following table to calculate the dollar cost of the euro-denominated debt gor years 0 through 3. Enter a positive number for a cash inflow and negative for cash outflow.
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