The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $ 77,800 Accounts receivable 55,000 Interest receivable 19,000 Notes receivable (due in 90 days) 173,000 Office supplies 16,000 Automobiles 174,000 Accumulated depreciation—Automobiles $ 85,000 Equipment 140,000 Accumulated depreciation—Equipment 16,000 Land 78,000 Accounts payable 103,000 Interest payable 35,000 Salaries payable 19,000 Unearned fees 36,000 Long-term notes payable 142,000 Common stock 27,580 Retained earnings 248,220 Dividends 51,000 Fees earned 474,000 Interest earned 30,000 Depreciation expense—Automobiles 25,500 Depreciation expense—Equipment 20,000 Salaries expense 184,000 Wages expense 41,000 Interest expense 35,000 Office supplies expense 34,200 Advertising expense 61,500 Repairs expense—Automobiles 30,800 Totals $ 1,215,800 $ 1,215,800

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u. s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht. a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?