Rockford Filing Ltd. requires $1 million in financing for a 45 day period. Three alternatives are being considered. Which alternative should be selected?
a. Establish a line of credit with the bank at an interest rate of 10 percent. The bank will charge an annual commitment fee of 1 percent to establish the line of credit.
b. Forgo trade discounts from suppliers on terms of 2/15, net 60.
c. Issue commercial paper for 45 days at a discount of 1.25 percent.