I need help with A and B

(Cost of short-term financing) The R. Morin Construction Company needs to borrow $100,000 to help finance the cost of a new $140,000 hydraulic crane used in the fimm's commercial construction business. The crane will pay for itself in 1 year, and the form is considering the following alternatives for financing its purchase Alternative A-The firm's bank has agreed to lend the $100,000 at a rate of 13 percent. Interest would be dhcounted, and a 16 percent compensating balance would be required. However, the compensating balance requirement would not be binding on R. Morin because the firm normally maintains a minimum demand deposit (checking account balance of $25,000 in the bank Alternative B-The equipment dealer has agreed to finance the equipment with a 1-year loan. The $100,000 loan would require payment of principal and interest totaling $116,340. a. Which atemative should R. Morin select? the bank's compensating balance requirement were to necessitat de demand deposits equal to 16 peront of the loan, what effect would this have on the cost of the bank loan alternative? a Which aterative should R. Morin select? The cost of imative A would be %. (Round to two decimal places)