joan co 17 bpp

hello sir
A factor has offered to take over receivable ledge administration and debt collection for Joan co for an annual fee of 0.5% of credit sales. A condition of the offer is that the factor will advance Joan 80% of the face value of its receivable at an interest rate of 1% above the current overdrafts rate.Joan pays interest of 8%. The factor claims it will reduce outstanding receivable by 30% and administration expenses by 2% if accepted.
Annual receivable 3800 000
Revenue 15 600 000
Administration expenses. 1000 000
Evaluate if acceptable.
Sir I don’t understand.