Question: DEF Corporation will be needing P1,000,000 additional cash inflow. It is looking to finance this through either Bank One or Bank Zero for a period

DEF Corporation will be needing P1,000,000 additional cash inflow. It is looking to finance this through either Bank One or Bank Zero for a period of 6 months. Bank One offers a 10% loan but requires a P20,000 bank charge. On the other hand, Bank Zero is willing to offer an 8% loan but requires P100,000 compensating balance. Which bank should DEF approach?

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