Cost of the loan to this canadian firm

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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

Multiple choice question. Answer should be from above options. Please include steps in your answer

Reference no: EM132478407

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