Answer:
A. The depreciation are been issued in reals and the interest as well as the principle are both being paid in reals. Although $ is actually the problem because that is where all the risk lies due to the fact that It will take more dollars to pay back compared to the real
B)
1.Brazilian = $69,225,000
2.Percentage cost -65.4%
C1. Brazilian $60,705,000
2)Percentage cost - 69.6%.
Explanation:
A. The depreciation are been issued in reals and the interest as well as the principle are both being paid in reals. Although $ is actually the problem because that is where all the risk lies due to the fact that It will take more dollars to pay back compared to the real.
B)
1.Brazilian 200M x (1.065) x 0.325
= $69,225,000
2.Percentage cost = ($69,225,000 - $200,000,000) / 200m
=-$130,775,000/$200,000,000
= -65.4%
C
1. Brazilian 200M x (1.065) x 0.285
= $60,705,000
2)Percentage cost = ($60,705,000 - $200,000,000) / $200M
=-$139,295,000/$200,000,000
= -69.6%.
