I need help :(

Hello. I’m having some difficulty in solving this question regarding the topic of Management of Working Capital ( Receivables & Payables)

okay here goes :-

Over the recent months R Co’s receivable days have increased. The receivables ledger now amounts to $200,000 which represents 65 days of sales, despite the credit period allowed being 30 days. Irrecoverable debts have also risen to 2% of sales. Working capital is financed by an overdraft, at an annual cost of 6%. This rate is not expected to change in the foreseeable future.

You are provided with the following further information
R Co has approached F Co, a factoring company. F Co offers the following terms:
(i) 80% of amounts receivable would be advanced immediately for a fee of 5% of the amount advanced.
(ii) F Co would bear the cost of bad debts.
(iii) Receivable days would be reduced to the 30 days customers are allowed.
(iv) F Co would charge 2% of sales as credit insurance.
If F Co’s services are engaged, R Co will no longer employ their credit controller thus saving $13,000 per annum. R Co also believes that sales will fall by $25,000 if the factoring company is used.

Annul profits are approximately 60% of sales.

Assume 365 days per year.

Prepare calculations that show whether F Co’s Services should be engaged. State your conclusion.