McDougan Associates$($USA$).$McDougan$$ Associates, a$$ U$.$S$.-$based investment$$ partnership, borrows euro$85$ comma $000$ comma $000$ at a time when the exchange rate is $$$$1\mathrm{.}3317$equalseuro$1\mathrm{.}00.$ The entire principal is to be repaid in three$$ years, and interest is $6\mathrm{.}850\%$ per$$ annum, paid annually in euros. The euro is expected to depreciate$$ vis$--$vis the dollar at $3\mathrm{.}2\%$ per annum. What is the effective cost of this loan for$$ McDougan?

Question content area bottom

Part $1$

Complete the following table to calculate the dollar cost of the$$ euro$-$denominated debt for years $0$ through $3.$ Enter a positive number for a cash inflow and negative for a cash outflow.$($Round the amount to the nearest whole number and the exchange rate to four decimal$$ places.$)$

Year $0$

Year $1$

Year $2$

Year $3$

Proceeds from borrowing euros

$$

$85,000,000$

Interest payment due in euros

$$

$$

$$

Repayment of principal in year $3$

$(85,000,000)$

Total cash flow of euro$-$denominated debt

$$

$$

$$

$$

Expected exchange rate, $ $=1\mathrm{.}00$

$1\mathrm{.}3317$

Dollar equivalent of euro$-$denominated cash flow

$

$

$

$