Marlow should select the (choices: inventory, or receivable) loan, since its cost is lower under the conditions presented.

(Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $460,000 for the 3-month period ending September 30, 2015. The firm has explored two possible sources of credit. a. Marlow has arranged with its bank for a $460,000 loan secured by its accounts receivable. The bank has agreed to advance Marlow 70 percent of the value of its pledged receivables at a rate of 12 percent plus a 1 percent fee based on all receivables pledged. Marlow's receivables average a total of $1 million year-round. b. An insurance company has agreed to lend the $460,000 at a rate of 10 percent per annum, using a loan secured by Marlow's inventory of salad oil. A field-warehouse agreement would be used, which would cost Marlow $1,500 a month. Which source of credit should Marlow select? Explain. Note: Assume a 30-day month and 360-day year The cost, or APR, of the pledging accounts receivable is 1%. (Round to two decimal places.) The cost, or APR of the loan secured by inventory is | %. (Round to two decimal places.) Marlow should select the V loan, since its cost is lower under the conditions presented. (Select from the drop-down menu.)