2.xx co. has a revolving credit agreement with its bank. the co. can borrow up to $1 million under the agreement at an annual interest rate of 9 percent. xx co. is required to maintain a 10 percent compensating balance on any funds borrowed under the agreement and to pay a 0.5 percent commitment fee on the unused portion of the credit line. assume that xx co. has no funds in the account at the bank that can be used to meet the compensating balance requirements. Determine the annual financing cost of borrowing each of the following amounts under the credit agreement:a. $250000b. $500000c. $10000003. xx co. has been approached by a commercial paper dealer offering to sell an issue of commercial paper for the firm. The dealer offering to sell an issue of commercial paper for the firm. the dealer indicates that xx co. could sell a $5 million issue maturing in 182 days at an interest rate of 6 percent per annum (deducted in advance). the fee to the dealer for selling the issue would be $8000. Determine xx co. annual financing cost of this commercial paper financing.Thank you