Central City Bank will lend Williams Inc. 60% of the value of its inventory at 12% if Williams will pledge the inventory as collateral for the loan. The bank also insists that Williams employ a warehousing company to monitor and control the inventoried material. Blyth Warehousing will do the job for an annual fee of $150,000 plus 2% of the value of all the inventory it handles. Williams’s moves inventory valued at about $15 million through its plant each year at a turnover rate of five times. What will the cost of financing be under this proposal? State the result in both dollar and percentage (of amount borrowed) terms.