Question: McDougan Associates, a U . S . - based investment partnership, borrows euro 7 5 , 0 0 0 , 0 0 0 at a

McDougan Associates, a U.S.-based investment partnership, borrows
euro75,000,000
at a time when the exchange rate is
$1.3413equals=euro1.00.
The entire principal is to be repaid in three years, and interest is
6.150%
per annum, paid annually in euros. The euro is expected to depreciate vis--vis the dollar at
3.5%
per annum. What is the effective cost of this loan for McDougan? McDougan Associates (USA). McDougan Associates, a U.S.-based investment partnership, borrows \(75,000,000\) at a time when the exchange rate is \(\$ 1.3413=1.00\). The entire principal is to be repaid in three years, and interest is \(6.150\%\) per annum, paid annually in euros. The euro is expected to depreciate vis--vis the dollar at \(3.5\%\) 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.)
McDougan Associates, a U . S . - based investment

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