Semester 2, 2020-21 ACF15007 Section C C1. Bridge Co makes annual sales of 12m. Credit terms on all sales are 30 days. The company is considering whether to use a factoring service which charges an annual fee of 1% of sales. This would save administration costs of 50,000 and the payment period would be shortened to 15 days. The factor provides an advance of 75% of invoiced debts at an interest rate of 9%. The overdraft facility used by the company charges 8% interest. Required: (a) Advise whether Bridge Co should use the factor's services. You must set out your workings in full. 14 marks (b) Critically evaluate the advantages and disadvantages for companies in using each of equity finance, debt finance and aggressive working capital management techniques to finance their activities. 11 marks Total: 25 marks