Company needs a loan of 100,000 for 1 month. Must find a secured shirt term lender. Forms account receivables are quite low but it's inventory is considered liquid and reasonable good collateral. The book value of the inventory is 300,000 or which 120,000 is finished goods. (Assume 365 day year)

-city wide bank will make a 100,000 trust receipt loan against the finished goods inventory. The annual interest rate on the loan is 12% on outstanding loan balance plus a .25 % admin fee levied against the 100,000 initial loan amount. Because it will be liquidated as inventory is sold the average amount owed over the month is expected to be 75,000.

-sun state bank will lend 100,000 against a floating lien on the book value of inventory for the 1 month period at an annual interest rate of 13%

-citizens bank and trust will lent 100,000 against a warehouse receipt on the finished goods inventory and charge 15% annual interest on the outstanding balance. A 0.5% warehousing fee will be levied against the average amount borrowed. Because the loan will be liquidated as inventory is sold the average loan balance is expected to be $60,000

A. Calculate the dollar cost of each proposed plans for obtaining an initial loan amount of 100,000

B. If the form had made a purchase of 100,000 for which is had been given terms 2/10 net 30 would it increase the firms profitability to give up the discount and not borrow from one of these banks? Why or why not