XYZ requires short term financing of 100 000-00 for the next year and it has been presented with the following financing options. Option 1 The company can take a one year loan at the bank at an interest rate of 24% per annum. Option 2 The company can forego the discount on its purchases. The company purchases 1 800 000-00 worth of goods per year and the terms offered by the suppliers are a 3% discount for paying its suppliers within 30 days. Option 3 The company can engage a factoring house. The firm makes 250 000 monthly credit sales and the factoring house is prepared to advance 80% of the amount of debtors. However the factoring house charges a 1,8% fee on the value of the invoices which is payable immediately. In addition the firm has to pay an interest of 28% on advanced funds for a period of 30 days which is the average collection period of the debtors, this is also payable immediately. Any excess funds can be invested in a savings account that earns interest of 18% per annum. Required: Advice the company on the best method of short term financing.