XYZ Company is in need of Php1 million and is faced with the following financing options: a. Establish a credit line with a bank. The company is required a compensating balance equivalent to 10% of the credit line to be maintained in a current/checking account. The company does not have excess cash to cover this compensating balance. Interest at 12% per annum will be paid on the used funds upfront upon the release of the loan proceeds. 3 b. Short-term bank loan can be availed at 13% per annum. XYZ Company would most probably need the short-term loan for 90 days. c. Accounts receivable due in 45 days can be discounted by a financing company at 7%. d. Payments to suppliers can be deferred for a period not exceeding 90 days. However, suppliers will add 10% on any amount deferred. What is the cost of each financing option? Which financing scheme should XYZ choose and why?