In a quiet suburban neighborhood, nestled on the corner of Elm Street, there lies a quaint corner shop, "Elm Mart," which operates as a sole trader that has been a familiar fixture for over two decades. However, in recent times, Elm Mart has been facing financial challenges and is in dire need of cash to sustain its operations and revive its business. The Challenge Elm Mart's financial struggles stem from various factors, including increased competition from larger retail chains, changing consumer preferences, and unexpected maintenance expenses. The store is facing a cash flow shortfall, struggling to pay suppliers, and maintain its inventory levels. The Need for Short-Term Financing To address its immediate financial woes, Elm Mart is exploring short-term financing options to inject cash into the business. The owner, Mrs. Smith, is considering a loan to bridge the gap and revitalize the store. The store is considering two loan options to address its immediate cash flow needs and revive its business. Elm Mart has two loan offers: Bank Loan: The local bank offers a loan with an initial principal amount of K150, 000. The Loan has a duration of 5 years with a relatively lower interest rate of 4.5%. Elm Mart can make end of month payments. Colleague Loan: A colleague is willing to lend Elm Mart the money at higher annual interest rate. It has a shorter duration of 2 years but comes with a higher interest rate of 10.5% and monthly payments should be made at the beginning of the month. Initial principal amount of K150,000. Elm Mart wants to make an informed decision and choose the loan option that is better suited to its financial situation. REQUIRED: i) Calculate the total cost of each loan option and determine which one is more favorable for Elm Mart. Provide your analysis and a recommendation based on the calculations. (9 marks) ii) What would be some of the challenges or risks Elm Mart would face in accessing both loans. (6 marks) iii) What other alternative sources of financing would Elm Mart consider in the short term