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This is for my finance class: Your U.S. company borrows £5,000,000 for one year at 7.375% interest.
A) What is the dollar cost of this debt if the pound depreciates from $1.3070/£ to $1.2040/£ over the year?
B) What is the dollar cost of this debt if the pound appreciates from $1.3070/£ to $1.4550/£ over the year?
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