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Accounting

Problem:

ABC Inc. borrows 100m JPY when JPY spot rate is JPY120/$. The JPY interest rate for the loan is 3%. One year later when ABC pays back the JPY principal and interest, the exchange rate is JPY 95/$.

Required:

Question: What is the dollar cost of ABC's JPY loan?

A. 3%

B. 30.1%

C.-18.46%

D. None of the above

Note: Please provide full description.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166293

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