1. R Corp. plans to acquire an equipment costing P2,400,000. A bank loan can finance the acquisition with a 10% discounted interest. Alternatively, the company may delay payment to its suppliers. Presently, the company buys under the terms 2/10, n/40, but believes that payment could be delayed 30 additional days without penalty (i.e. payment could be made in 70 days). What is the best option available to R?

2. A company enters into an agreement with a firm that will factor the companys accounts receivable. The factor agrees to buy the receivables, which average P100,000 per month, and have an average collection period of 30 days. The factor will advance up to 80% of the face value of the receivables at an annual rate of 10% and charge a fee of 2% on all receivables purchased. The company estimates that the company would save P18,000 in collection expenses over the year. Fees and interest are not deducted in advance. Based on a 360-day year, what is the annual cost of financing?