Which of the following offer the lowest effective rate for Wolf Howl jackets? Assume Wolf Howl will need to borrow $800,000 for 180 days.
a. A 14% APR bank loan
b. A 13% APR, discounted bank loan.
c. 12.5% APR with fees of 1% for receivables financing.
d. A $2 million revolving-credit agreement with an APR of 12% with a commitment fee of 0.5% on the unused balance and a 10 percent compensating balance requirement.