(Solution Download) International Finance. Where should the firm borrow?

US based ABC firm wants to raise $20 million. It can choose from borrowing a US loan @ 10% interest loan annually, euro loan @ 15%, yen loan @ 6%.
It expects the euro to depreciate 6% against the $ annually, and the yen to appreciate 2% against the $. Find the effective cost of the euro and the yen l...