10. Andersen Sports (B): Bank Credit Line with Export Credit Insurance. Andersen could also buy export credit insurance from FCIA for a 1.5% premium. It finances the $100,000 receivable from Kim from its credit line at 6% per annum interest. No compensat- ing bank balance would be required.

a. What is Andersen's annualized percentage all-in- cost of financing?

b. What are Kim's costs?

c. What are the advantages and disadvantages of this alternative compared to the bankers' accep- tance financing in Andersen (A)? Which alterna- tive would you recommend?