Question: EOQ analysis determines optimal amounts of inventory for different office supplies. The manager wonders if the same type of analysis can determine an optimal borrowing policy. Determine the amount of the loan the manager should borrow from the bank, the total annual cost of the company’s borrowing policy and the number of loans the company should obtain during the year. Also determine the level of cash on hand at which the company should apply for a new loan given that it takes 15 days for a loan to be processed by the bank. Suppose the bank offers a discount as follows: on any loan amount equal to or greater than $500,000, the bank will lower the number of points charged on the loan origination fee from 2.25% to 2.00%. What would be the company’s optimal amount borrowed?