Firm X sells 5,000,000 of products to Firm Y. Payment would be due in six months. Since Firm X cannot find good credit information on Firm Y, Firm X wants to protect its credit risk. It is considering the following financing solution.

Firm Ys bank issues a letter of credit on behalf of Firm Y and agrees to accept Firm Xs draft for 5,000,000, due in six months. The acceptance fee is 1.0% per annum of 5,000,000 that reduces Firm Ys available credit line by 5,000,000. The bankers acceptance note of 5,000,000 would be sold at a 3.75% per annum discount in the money market. What is the annualized percentage all-in-cost to Firm X of this bankers acceptance financing?