ABC Company is considering to establish a line of credit with a local bank to make up for the cash deficit for the next three months. The company expects a 60% chance for a $230,660 deficit and a 40% chance for no deficit at all. The line of credit charges 0.59% of interest rate per month on the amount borrowed plus a commitment fee of $2,500 for a quarter. It also requires a 6% compensation balance for outstanding loans. The company can reinvest any excess cash at an annual rate of 8%. What will the expected cost of establishing a line of credit be? Round your answer to the nearest dollar. (Hint: Refer to a numerical example in short-term financing choices.) O $5,100 $5.115 O $5,106 O $5.111 O $5,121 -Net income-Pref -$655,500-($2000 -$655,500-$60,00 =$595,500 EPS Earning availa $595,500/263,805 =$2.26 Was this answer helpf Post a questi