P18-9 (similar to) Question Help (Related to Checkpoint 18.2) (Calculating the cost of short-term financing) The R. Morin Construction Company needs to borrow $100,000 to help finance the cost of a new $150,000 hydraulic crane used in the firm's commercial construction business. The crane will pay for itself in one year, and the firm is considering the following altenatives 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 discounted, and a 15 percent compensating balance would be required. However, the compensating-balance requirement is not binding on the firm because it normally maintains a minimum demand deposit (checking account) balance of $25,000 in the bank $117,380 a. Which alternative should Morin select? b. Il the bank's compensating-balance requirement had necessitated idle demand deposits equal to 15 percent of the loan what effect would this have had on the cost Altermative B. The equipment dealer has agreed to finance the equipment with a 1-year loan The $100 000 loan requires payment of principal and interest totaling of the bank loan alternative? a. The cost of Alternative A would be L (Round to two decimal places ) Enter your answer in the answer box and then click Check Answer 4 parts remaming Clear All Check