Dynamic Corporation has an existing loan in the amount of $8 million with an annual interest rate of 6.3%. The company provides an internal company-prepared financial statement to the bank under the loan agreement. Two competing banks have offered to replace Dynamic Corporation's existing loan agreement with a new one. Sunset Lending Bank has offered to loan Dynamic $8 million at a rate of 5.1% but requires Dynamic to provide financial statements that have been reviewed by a CPA firm. First Capital Bank has offered to loan Dynamic $8 million at a rate of 4.2% but requires Dynamic to provide financial statements that have been audited by a CPA firm. Dynamic Corporation's controller approached a CPA firm and was given an estimated cost of $26,000 to perform a review and $51,000 to perform an audit. Read the requirements. (Enter amounts in dollars, not millions, throughout.) Requirement b. Calculate Dynamic Corporation's annual costs under each loan agreement, including interest and costs for the CPA firm's services. Indicate whether Dynamic should keep its existing loan, accept the offer from Sunset Lending Bank, or accept the offer from First Capital Bank. Begin by calculating the annual costs under each loan agreement. (Complete all input fields. Enter a "0" for any zero balances.) a. Explain why the interest rate for the loan that requires a review report is lower than that for the loan that does not require a review. Explain why the interest rate for the loan that requires an audit report is lower than the interest rate for the other two loans. b. Calculate Dynamic Corporation's annual costs under each loan agreement, including interest and costs for the CPA firm's services. Indicate whether Dynamic should keep its existing loan, accept the offer from Sunset Lending Bank, or accept the offer from First Capital Bank. c. Assume that Sunset Lending Bank has offered the loan at a rate of 5.1% with a review, and the cost of the audit has increased to $116,000 due to new auditing standards requirements. Indicate whether Dynamic should keep its existing loan, accept the offer from Sunset Lending Bank, or accept the offer from First Capital Bank. d. Discuss why Dynamic may desire to have an audit, ignoring the potential reduction in interest costs. e. Explain how a strategic understanding of the client's business may increase the value of the audit service