TECHNOTHERM CORPORATION was founded in 1972 by bringing together a skilled professional team established in the field of waste heat recovery. Technotherm just executed a 3 year contract with the State of Germany to deliver (10) Firetube Boilers to a state-owned entity. Each Boiler Technotherm constructs can be built in Belgium or Tulsa, OK. The cost of manufacturing is 2,750,000. The terms of the contract specify that Technotherm must accept payment for the Boilers in Euro, which isn't a problem because Technotherm maintains a multi-currency account in London and it holds plenty of . It will take Technotherm 3 years to complete the construction and delivery of the Boilers. Technotherm's CFO looked up the conversion rates of $/ for today and in 3 years. The Spot $/ rate is 1.05476 and the 3yr Forward is 1.10757. Also, the CFO checked the 30-day and 90-day LIBOR rates, which are 4.22% and 4.73% respectively. Three year SWAP rates are 3.84% for 30-day LIBOR and 4.83% for 90 day LIBOR. Technotherm must borrow finance the construction of the Boilers. The company has two financing options: USBANK: 1. 75% of the cost of manufacturing 2. Interest only per annum, paid in monthly payments. 3. Rate Options: a. 30 DAY LIBOR + 6% b. 10% FIXED FOR 3 YEARS DEUTCHE BANK: 1. 80% of the cost of manufacturing 2. Interest only per annum, paid in quarterly payments 3. Rate Options: a. 90 DAY LIBOR +5% b. 9% FIXED FOR 3 YEARS 1. Assuming the cost of equity for Technotherm is 10%: What is the cost of equity in USD at the end of the period?