Question 4: (20 marks) a. What advantages do nonfinancial performance measures have over financial performance measures? b. Company KPC has average trade receivables of $580,000 and annual sales of $1.25 million. It is considering the use of factoring given that this would result in a reduction in credit control costs of $92,000 per annum. The factoring house charges a fee of 1.9% of sales. It will provide an advance to the company of 92% of its receivables and will charge interest on this advance of 14% per annum. Required: Assess whether it is financially beneficial for company KPC to enter into this factoring arrangement. c. A Toys Company has 1.2 million shares in issue. The current market price is $28 per share. The company's debt is publicly traded on the London Stock Exchange and the most recent quote for its price was at 94% of face value. The debt has a total face value of $8 million and the company's credit risk premium is currently 2.7%. The risk-free rate is 3.6% and the equity market risk premium is 7.1%. The company's beta is estimated at 0.96 and its corporate tax rate is 36% Required: Calculate the company's WACC. [Marks: (6+7+7) = 20)