1. If the company needs $1,000,000 to pay the taxes urgently. It has three choices to source this amount.(REQUIRED FOR ONE MONTH)

1. Drawing down on a line of credit at 3 percent with a 1/4 percent commitment fee on the full amount. Note: One-twelfth of the cost of the commitment fee (which gives an option to borrow any time during the year) is allocated to the first month.
2. A bankers acceptance at 2.80 percent, an all-inclusive rate.
3. Commercial paper at 2.20 percent with a dealers commission of 1/6 percent and a backup line cost of 1/4 percent, both of which would be assessed on the $1 million of commercial paper issued.

Calculate the cost of borrowing for all the above sources.