Assignment Detail

Tutors

How much the biopharma-australia will make a profit

    Assignment Instructions

    Assignment ID: FG132966150

    Problem 1: Biopharma-Australia can borrow fund in Australia with an interest rate of 11.21% to invest 1.62 million Chinese yuan (CNY)  and expected return of CNY2.13 million next year. Assume that Biopharma-Australia and Haier-China engage in a parallel  loan in which the Haier-China gives Biopharma Australia CNY1.62 million in exchange for a loan in Australian dollar (A$) at  the current exchange rate A$0.1964/CNY. These loans will be repaid by both parties at the end of one year. Assume that  next year, Biopharma-Australia will pay the Haier-China 14.33% interest on CNY1.62 million and that the Haier-China will  pay Biopharma-Australia 7.18% interest on the Australian dollar loan. Also, Biopharma-Australia believes that the CNY will  appreciate to A$0.2818/CNY next year. How much the Biopharma-Australia will make a profit or loss in A$ from this  parallel loan agreement in one year?

    Need fresh solution to this Assignment without plagiarism?? Get Quote Now

    Expert Answer

    Asked by: Anonymous
    Plagiarism Checked
    Answer Rating:
    4.6/5

    Plagiarism free Answer files are strictly restricted for download to the student who originally posted this question.

    Related Assignments

    //
    Our customer support team is here to answer your questions. You can send Assignments directly to support team.
    👋 Hi, how can I help?