Small Business Finance Homework: Chapter 15 Homework Score: 0 of 3 pts Problem 15-6 (similar to) Save 5 of 16 (0 complete) Hw Score: 0%, 0 of 77 pts Question Help * (Cost of secured short-term credit) The Marlow Sales and Distribution Co. needs $480,000 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 $480,000 loan secured by its accounts receivable. The bank has agreed to advance Marlow 80 percent of the value of its pledged receivables at a rate of 9 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 $480,000 at a rate of 7 percent per annum, using a loan secured by Marlows inventory of salad oil. A field-warehouse agreement would be used, which would cost Marlow $1,800 a month. Which source of credit should Marlow select? Explain. Note: Assume a 30-day month and 360-day year % (Round to two decimal places.) The cost or APR, of the pledging accounts receivable is Enter your answer in the answer box and then click Check