Calculate the effective borrowing rates as measured

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Wood company can borrow needed expansion money in several different countries. The nominal rates of interest is 8% if borrowed in Mexican pesos or at 3% in Canadian dollars. The peso is expected to depreciate by 10% relative to the US dollar and the Canadian dollar is expected to appreciate by 3%. Calculate the effective borrowing rates as measured in US dollars and make a recommendation as to how the company should obtain the needed money.

Reference no: EM13946821

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