McDougan Associates (USA). McDougan Associates, a U.S.-based investment partnership, borrows 90,000,000 at a time when the exchange rate is $1.3498/. 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--vis the dollar at 3.3% 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.) Year 0 Year 1 Year 2 Year 3 Proceeds from borrowing euros 70,000,000 Interest payment due in euros (4,515,000) (4,515,000) (4,515,000) Repayment of principal in year 3 70,000,000 (4,515,000) (4,515,000) (70,000,000) 74,515,000 Total cash flow of euro-denominated debt Expected exchange rate, $/ Dollar equivalent of euro-denominated cash flow What is the effective cost of this loan for McDougan? 2.83% (Round to two decimal places.) 1.3402 1.2946 1.2506 1.2081 $ 93,814,000 $ (5,845,119) $ (5,646,459) $ (90,021,572)