The Following Information Pertains to Questions

question 12

Multiple Choice

The following information pertains to questions
XYZ Corp has a calendar year end.On January 1,2010,the company borrowed $5,000,000 U.S.dollars from an American Bank.The loan is to be repaid on December 31,2013 and requires interest at 5% to be paid every December 31.The loan and applicable interest are both to be repaid in U.S.dollars.XYZ does not hedge to minimize its foreign exchange risk.
The following exchange rates were in effect throughout the term of the loan: The average rates in effect for 2010 and 2011 were as follows:
-At would amount (in Canadian Dollars) would XYZ record its initial Loan Liability on January 1,2010.

• A)$5,476,500
• B)$5,750,000
• C)$5,747,500
• D)$5,471,500

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Definitions:

Pepsinogen

The inactive precursor of pepsin, a digestive enzyme that is secreted by the stomach wall and activates in gastric acid.

Chief Cells

Cells found in the stomach and parathyroid glands that are responsible for secreting pepsinogen and parathyroid hormone, respectively.

Parietal Cells

Cells within the lining of the stomach that produce and secrete hydrochloric acid and intrinsic factor, crucial for digestion and absorption of vitamin B12.

Serous Cells

Cells that produce serous fluid, a watery secretion, found in glands like the salivary glands.