ABC company is considering factoring its receivable. The firm has credit sales of $600,000 per month and an average receivable balance of $600,000 with net 90 credit terms. The10% difference in the advance and the face value of all receivables factored consists of a 0.5% factoring fee plus a 9.5% reserve. The factor will advance a loan which equals 85% of the receivables factored less interest on the loan at 1.5% per month. Under the factoring arrangement, evaluate the cost of borrowing the maximum amount of credit available to ABC company? (Calculate the APR and EAR and make any necessary assumption)