The Following Information Pertains to Questions

question 29

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:
-What is the amount of interest expense (in Canadian Dollars) recorded for 2010?

• A)$250,000
• B)$372,500
• C)$287,325
• D)$287,250

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Definitions:

Test Statistic

A value calculated from sample data used to determine whether to reject the null hypothesis in hypothesis testing.

Online Usage

The pattern or extent of use of the internet and its services by individuals or groups.

Standard Deviation

A measure of the dispersion or spread of a set of numbers, indicating how much the values in the set deviate from the mean.

Test Statistic

A calculated value from sample data used to test a hypothesis within the framework of a statistical test.