2. The Dud Company purchases raw materials on terms of 2/10, net 30. A review of the company's records by the owner, Mr. Dud, revealed that payments are usually made 15 days after purchases are received. When asked why the firm did not take advantage of its discounts, the bookkeeper, Mr. Grind, replied that it cost only 2 percent for these funds, whereas a bank loan would cost the firm 12 percent.