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Your firm needs to borrow $1.0 million for one year. The firm has no other short term borrowings and it's combined state and federal tax

Your firm needs to borrow $1.0 million for one year. The firm has no other short term borrowings and it's combined state and federal tax rate is 25%. Your banker offers several lending alternatives. Which one will you choose?

Select one:

a. 8.00% simple interest with a 15.00% compensating balance

b. 11.00% discount interest

c. 7.00% simple interest with a 20% compensating balance

d. 10.00% simple interest

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