18.The treasurer of Pharmally Manufacturing Company is faced with three alternative bank loans. The firm wishes to select the one that minimizes its cost of credit on a P200,000 note that it plans to issue in the next 10 days. relevant information for the three loan configurations is as follows:
A. An 18% rate of interest with interest paid at the end of the loan period and no compensating balance requirement.
B. A 16% rate of interest and a 20% compensating balance requirement. this loan also calls for interest to be paid at the end of the loan period.
C. A 14% rate of interest that is discounted plus a 20% compensating balance requirement.
What is the effective cost of credit of alternative A?
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