A Canadian-based MNC borrows $50 million from London Enterprises when the exchange rate is $1.50/£. A year later, repayment with interests and principal becomes £52 million. What will be the cost of the loan to this Canadian firm if GBP has appreciated to $1.60/£ over the year?  

A)            4.00%
B)             10.93%
C)             -2.50%
D)            Undetermined

Please note, there is a similar question published but the initial amount of the loan is £50, which is different from the case I'm asking about. 

Answer rating: 100% (QA)

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