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McDougan Associates ( USA ) . McDougan Associates, a U . S . - based investment partnership, borrows 7 0 , 0 0 0 ,

McDougan Associates (USA). McDougan Associates, a U.S.-based investment partnership, borrows 70,000,000 at a time when the exchange rate is $1.3446=1.00. The entire principal is to be repaid in three years, and interest is 6.750% per annum, paid annually in euros. The euro is expected to depreciate vis--vis the dollar at 2.9% 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 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.)
\table[[,,Year 0,Year 1,Year 2,Year 3],[Proceeds from borrowing euros,,70,000,000,,,],[Interest payment due in euros,,,,,],[Repayment of principal in year 3,,,,,(70,000,000)
McDougan Associates (USA). McDougan Associates, a U.S.-based investment partnership, borrows 75,000,000 at a time when the exchange rate is $1.3397=1.00. The entire principal is to be repaid in three years, and interest is 6.750% per annum, paid annually in euros. The euro is expected to depreciate vis--vis the dollar at 3% per annum. What is the effective cost of this loan for McDougan?
Complete the following table to calculate the dollat 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.)
\table[[,,Year 0,Year 1,Year 2,Year 3],[Proceeds from borrowing euros,,75,000,000,,,H],[Interest payment due in euros,,,,5062500,],[Repayment of principal in year 3,,,,,(75,000,000)
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