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(Related to Checkpoint? 18.2) ?(Calculating the cost of?short-term financing) The R. Morin Construction Company needs toborrow ?$90,000 to help finance the cost of a new ?$135,000hydraulic crane used in the? firm's commercial constructionbusiness. The crane will pay for itself in one? year, and the firmis considering the following alternatives for financing its?purchase: Alternative A.???The? firm's bank hasagreed to lend the ?$90,000 at a rate of 12 percent. Interest wouldbe? discounted, and a 15 percent compensating balance would berequired.? However, the? compensating-balance requirement is notbinding on the firm because it normally maintains a minimum demanddeposit? (checking account) balance of ?$22 comma 500 in thebank.Alternative B.???The equipment dealer hasagreed to finance the equipment with a? 1-year loan. The ?$90,000loan requires payment of principal and interest totaling?$104,436.a. Which alternative should Morin? select?b. If the? bank's compensating-balance requirement hadnecessitated idle demand deposits equal to 15 percent of the? loan,what effect would this have had on the cost of the bank loan?alternative?a. The cost of Alternative A would be ______%. ?(Roundto two decimal? places.)