How much the haier-china will make a profit or loss in cny

Reference no: EM133331767

Question: Haier-China can borrow fund in China with an interest rate of 11.46% to invest 1.68 million Australian dollars (A$) and expected return of A$1.93 million next year. Assume that Haier-China and Biopharma-Australia engages in a parallel loan in which the Biopharma-Australia gives Haier-China A$1.68 million in exchange for a loan in Chinese yuan (CNY) at the current exchange rate CNY3.2815/A$. These loans will be repaid by both parties at the end of one year. Assume that next year, Haier-China will pay Biopharma-Australia 14.26% interest on A$1.68 million and that the Biopharma-Australia will pay Haier-China 7.27% interest on the Chinese yuan loan. Also, Haier-China believes that the A$ will appreciate to CNY3.6247/A$ next year. How much the Haier-China will make a profit or loss in CNY from this parallel loan agreement in one year. (enter the whole number without sign or symbol)

Reference no: EM133331767

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