You are presented with two options to finance some receivables - Option 1 is a 45 day loan secured against receivables from Finance Co. and Option 2 is a 60 inventory loan from Bank Co. Question 1: Calculate the effective annual cost in % of each option? Question 2: which is better by how much in annual %. (Use the same loan amount for both options) As well in both cases the two companies will only lend you 75% of your receivables. Your receivables are stated at $10.M. Other information is noted below:

2% Loan from Bank Co. Prime rate Field warehouse loan fee Loan rate Final fee at the end $ 100.00 2% $5,000 per day above prime at loan end 4% Loan from Finance Co. Annual Loan Rate Monthly Processing Fee Monthly Insurance Fee 0.30% 0.05% 2% Loan from Bank Co. Prime rate Field warehouse loan fee Loan rate Final fee at the end $ 100.00 2% $5,000 per day above prime at loan end 4% Loan from Finance Co. Annual Loan Rate Monthly Processing Fee Monthly Insurance Fee 0.30% 0.05%