$($b$)$ Renata Pharmaceuticals Lid plans to import active ingredients to produce vitamin syrup. The company's managers are considering three financing options for the Taka equivalent of an invoice value of Tk$.2\mathrm{.}5$ millign. The options are detailed below.

Option $1$: Use supplier's credit. The credit term is $\frac{1\mathrm{.}5}{10}$ net $45.$

Option $2$: Issue a $3-$month commercial paper to raise the money from the Bangladeshi money market. The commercial paper will pay interest at the rate of $18\%$ per annum. Issue costs totaling Tk$.15,000$ will be incurred.

Option $3$: Obtain a $3-$month bank loan. The interest rate on the loan is $22\%$ per annum. Loan arrangement and processing fees are expected to be Tk$.5,000.$

Required:

$($i$)$ Compute the effective annual cost of each financing option and recommend the most cost$-$effective option.

$($ii$)$ Explain TWO $(2)$ advantages of financing the invoice through the issue of a commercial paper instead of a bank loan.