A-8.3 Gainsborough Fashions Ltd. operates a small chain of clothing stores in British Columbia. In recent months, the business has been under pressure from its suppliers to reduce the average payment period from three months to one month. As a result, the management of the business has approached the bank to ask for an increase in the existing overdraft for one year to be able to comply with the suppliers' demands. The most recent accounts of the business are as follows: Notes 1. The current overdraft bears an interest rate of 12% per year. 2. The bonds are secured by personal guarantees from the members of the board of directors. Gainsborough Fashions Ltd. Abbreviated Income Statement for the year ended May 31,2010 Gainsborough Fashions Ltd. Statement of Retained Earnings for the year ended May 31,2010 Required: (a) Identify and discuss the major factors that a bank would take into account before deciding whether or not to grant an increase in the overdraft of a business. (b) State whether, in your opinion, the bank should grant the required increase in the overdraft for Gainsborough Fashions Ltd. Provide reasons and supporting calculations