A Ltd. has total sales of Rs 3.6 crores and its average collection period is 90 days. The past experience indicates that bad debt losses are 2% on sales. The expenditure incurred by the firm in administering its receivable collection efforts are Rs 5,50,000. A factor is prepared to buy the firms receivables by charging 2% commission. The factor will pay advance on receivables to the firm at an interest rate of 18% p.a. after withholding 10% as reserve. Calculate the following: 1. Advance to be paid 2. Amount available for advance (Advance to be paid minus Interest) 3. Annualized cost of factoring 4. Net cost of factoring to the firm (Annualized Benefits- Annualized cost) 5. Effective cost of factoring to the firm (Net cost/ Amount available for advance)