KanjiCan Inc., a Japanese firm, has just borrowed €1,000,000 to make improvements to a French grape plantation and processing plant. The interest rate is 6.50% per year and the Euro Yen rate goes from 100¥/€ at the time the loan was made to 95¥/€ at the end of the first year.
How much interest will KanjiCan pay at the end of the first year (rounded and in euros)?
How much interest and principle will KanjiCan pay at the end of the first year if they repay the entire loan plus interest (rounded and in yen)?
What is the before tax cost of capital if KanjiCan repays the entire loan plus interest (rounded to two decimals)?