A D G M N A1 Xf The Soho Corporation wishes to raise $3,000,000 for a period of one year. The firm has narrowed its chor E H K 1 The Soho Corporation wishes to raise $3,000,000 for a period of one year. The firm has narrowed its choice to two alternatives: 2 1) A 10% ordinary interest loan from its commercial bank with a 2% origination fee payable in advance) and a required 3 compensating balance of 12% of the principal. 4 5 2) Foregoing discounts from suppliers at terms of 2/10, net 45. 6 7 Required: 8 Determine the effective annual interest rate (EAR) to Soho Corp. of each of the two financing alternatives. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31