2. Eaton Corporation borrows $150,000 for 1 year at 7.25% interest but is required to maintain a 25% average compensating balance. Calculate the AFC below Microsoft has a $500,000 line of credit at .5% above the prime rate. The prime rate was 6% for the first 120 days and 6.55% for the remaining 8 months. Assume Microsoft borrows S350,000 on January 1st and repays the balance with 1 payment on December 31t. Calculate the annual financing costs below. a. Google issues S50,000,000 worth of commercial paper for 90 days at 6.25% annual interest. The placement fee is $30,000. Calculate the AFC below b. Hershey has a S5 million revolving credit agreement. Hershey predicts it will borrow $2.25 million on average at 6.75% annually. In addition, it must maintain an additional compensating balance at the bank of $200,000. The commitment fee is .75% of any unused funds. Calculate the AFC on the revolving credit agreement. c. d. Ashland Shipping is considering pledging it's A/R to increase its working capital position. Associated Bank will lend 80% of the pledged receivables at 1.5% above the prime rate which is currently at 7.25%. The bank charges a service fee equal to 1.1 percent of the pledged receivables Both the interest and service charge are payable at the end of the borrowing period. Ashland Shipping has an average collection period of 49 days and it has $1,500,000 of receivables for collateral. Calculate the AFC below 2. Eaton Corporation borrows $150,000 for 1 year at 7.25% interest but is required to maintain a 25% average compensating balance. Calculate the AFC below Microsoft has a $500,000 line of credit at .5% above the prime rate. The prime rate was 6% for the first 120 days and 6.55% for the remaining 8 months. Assume Microsoft borrows S350,000 on January 1st and repays the balance with 1 payment on December 31t. Calculate the annual financing costs below. a. Google issues S50,000,000 worth of commercial paper for 90 days at 6.25% annual interest. The placement fee is $30,000. Calculate the AFC below b. Hershey has a S5 million revolving credit agreement. Hershey predicts it will borrow $2.25 million on average at 6.75% annually. In addition, it must maintain an additional compensating balance at the bank of $200,000. The commitment fee is .75% of any unused funds. Calculate the AFC on the revolving credit agreement. c. d. Ashland Shipping is considering pledging it's A/R to increase its working capital position. Associated Bank will lend 80% of the pledged receivables at 1.5% above the prime rate which is currently at 7.25%. The bank charges a service fee equal to 1.1 percent of the pledged receivables Both the interest and service charge are payable at the end of the borrowing period. Ashland Shipping has an average collection period of 49 days and it has $1,500,000 of receivables for collateral. Calculate the AFC below