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Oshkosh Plastics can issue bonds in Costa Rica with a par value of 40 million Costa Rican colones (CRC), a six percent coupon rate, and

Oshkosh Plastics can issue bonds in Costa Rica with a par value of 40 million Costa Rican colones (CRC), a six percent coupon rate, and priced at par (100% of par value). Oshkosh Plastics can issue two-year bonds, three-year bonds, or four-year bonds. The forecasted exchange rates are CRC 590 per USD 1 at the end of year one, CRC 610 per USD 1 at the end of year two, CRC 635 per USD 1 at the end of year three, and CRC 620 per USD 1 at the end of year four. Assume Oshkosh Plastics issues the two-year bonds. Calculate the USD cash flows needed each year to cover the bond payments. Explain your answer.

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