?(Cost of factoring?) MDM Inc. is considering factoring its receivables. The firm has credit sales of ?$350 comma 000350,000 per month and has an average receivables balance of ?$700 comma 000700,000 with? 60-day credit terms. The factor has offered to extend credit equal to 9393 percent of the receivables factored less interest on the loan at a rate of 1.51.5 percent per month. The 77 percent difference in the advance and the face value of all receivables factored consists of a 22 percent factoring fee plus a 55 percent? reserve, which the factor maintains. In? addition, if MDM Inc. decides to factor its? receivables, it will sell them? all, so that it can reduce its credit department costs by ?$1 comma 6001,600 a month. a. What is the cost of borrowing the maximum amount of credit available to MDM Inc. through the factoring? agreement? Note?: Assume a? 30-day month and? 360-day year. b. What considerations other than cost should MDM Inc. account for in determining whether to enter the factoring? agreement?