Detailed Answer
Answer (C) is correct. The total cost to the company will be $51,500 ($50,000 discount + $1,500 of transaction costs), and the net amount available will be $1,448,500. The annualized amount of the costs is $206,000 ($51,500 × 4). Accordingly, the annual interest cost will be 14.22% ($206,000 ÷ $1,448,500).