Raw Inc buys in sand, gravel, cement powder and steel reinforcement. These raw materials cost about $30 million most years. Raw Inchas recently enjoyed a surge in sales after it liberalised its credit policies. The result of the change in credit policies was that the value of debtors rose and management decided it must hold higher levels of raw material stocks. As a result, Raw Inc has experienced something of a cash squeeze. The financial manager thinks a $500 000 180-day BAB (Bank acceptance commercial bill) will give the entity time to sort out the increased debtor problems. This finance will cost 7 per cent per annum. The sales manager suggests the entity should slow down its own payments to average 45 days to match the increase in debtors. Alternatively Raw Inc Products has been in contact with a factoring company who has offered to take over a proportion of their debtors at a rate of 80% of the original debtors balance (i.e. a 20% discount). What plan of action do you suggest for Raw Inc? What are the advantages and disadvantages of each of the strategies that have been put forward?