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Problem 14-3 (algorithmic) Question Help McDougan Associates (USA). McDougan Associates, a U.S.-based investment partnership, borrows 75,000,000 at a time when the exchange rate is $1.3336/.

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Problem 14-3 (algorithmic) Question Help McDougan Associates (USA). McDougan Associates, a U.S.-based investment partnership, borrows 75,000,000 at a time when the exchange rate is $1.3336/. The entire principal is to be repaid in three years, and interest is 6.550% 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 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 75,000,000 Interest payment due in euros (75,000,000) Repayment of principal in year 3 Total cash flow of euro-denominated debt Expected exchange rate, $/ 1.3336 Dollar equivalent of euro-denominated cash flow $ $ FA

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