Which loan has the lower effective annual interest rate

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Reference no: EM131535549

Denim Industries can borrow its needed financing for expansion using one of two foreign lending facilities. It can borrow at a nominal annual interest rate of 9%

in Mexican pesos or it can borrow at 6% in Canadian dollars. If the peso is expected to depreciate by 11.97% and the Canadian dollar is expected to appreciate by 2%,

which loan has the lower effective annual interest rate?

Reference no: EM131535549

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