Raya Enterprises is in the business of selling dishwashers. The firm needs $192,000.00 to finance an anticipated expansion in receivables due to increased sales. Raya's credit terms are net 40, and its average monthly credit sales are $180,000.00. In general, the firm's customers pay within the credit period; thus, the firm's average accounts receivable balance is $240,000.00. The finance manager of mrgan cong, Mr. Lee, approached their bank for the needed capital, pledging the accounts receivable as collateral. The bank offered to make the loan at a rate of 2 percent over prime plus a 1 percent processing charge on all receivables pledged. The bank agreed to loan up to 80 percent of the face value of the receivables pledged. REQUIRED: (1) Calculate the cost of the receivables loan to Raya Enterprise where the firm borrows the $192,000.00. The prime rate is currently 13%. (ii) Mr Lee also requested a line of credit for $192,000.00 from the bank. The bank agreed to grant the necessary line of credit at a rate of 4% over prime and required a 12% compensating balance. The company currently maintains an average demand deposit of $40,000.00. Estimate the cost of the line of credit to Raya. (iii) Which source of credit should Raya Enterprises select and why?