Burlap Ltd manufactures burlap sacks for the transport of maize on a very large scale and the company has experienced volatile short-term funding requirements over the past year. The management of the company wishes to change the way it funds its short-term funding requirements of R10 000 000. Currently, the company has an estimated long-term borrowing cost of 3% (variable) and access to a short-term facility at a cost of 3.5% capped at R3 000 000 and a revolving credit facility of R7 000 000 at a rate of 4%. The management of the company has further determined that its permanent funding requirements are 70% of its total short-term funding requirement. The management also decided that R1 000 000 of capacity on either the short-term facility or revolving credit should be left unused and kept in reserve for emergency use. It was recently discussed at a management meeting that the company should change from its current aggressive short-term financing plan as it has run out of capacity more than once over the past year. Consequently, costly quick access to short-term loans had to be arranged to make up the shortfall. REQUIRED: Determine the least costly approach the company could take to finance its short-term financing needs. Then, briefly discuss the advantages and disadvantages of this approach compared to the current approach followed by Burlap Ltd.