Question
Lucys is a US-based restaurant chain that is expanding to Taiwan. Lucy can either borrow from a Taiwan-based bank at 9.75% (in TWD) or from
Lucy’s is a US-based restaurant chain that is expanding to Taiwan. Lucy can either borrow from a Taiwan-based bank at 9.75% (in TWD) or from a US bank at 6.25%. The spot rate is USD 0.1558 = TWD 1. Economists estimate for inflation in the US is 1.5% and 5.2% in Taiwan. If Lucy’s wants the lowest cost loan for their US-based shareholders, which loan should Lucy’s take?
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Lucys should take the loan from the US bank The formula for re...
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College Physics
Authors: Jerry D. Wilson, Anthony J. Buffa, Bo Lou
7th edition
9780321571113, 321601831, 978-0321601834
