Banana Co. can obtain a short-term loan at a rate of 5% and long-term loan at a rate of 8%. It has permanent current assets of $30,000 and temporary current assets of $12,000. Calculate the cost of financing if the companys policy is to:

finance permanent current assets and of temporary current assets with long-term debt

finance remaining temporary current assets with short-term debt

Select one:

a.

Not enough information to answer this question.

b.

$2,280

c.

$3,180

d.

$3,000