Assume you are the Treasurer of Mosaic, with 90-day payment term to all your vendors. If one of your large vendors offers you a 2/30,n/90 term(2% discount for 60-day early payment)on a purchase of $10,000,000.

Assume your cost of capital = 10%

Assuming you have 60-day payment term and one of your customers requested to pay you 30-days early, if you give him a 2%discount.

e.What is the annualized cost of the discount requested by your customer?

f.Will you accept it? Explain