Check my work 7 Problem 8-22 Bank loan to take cash discount [LO8-1, 8-2] The Reynolds Corporation buys from its suppliers on terms of 3/13, net 35. Reynolds has not been utilizing the discounts offered and has been taking 35 days to pay its bills. ook Ms. Duke, Reynolds Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of 17 percent. The bank requires a 27 percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement. int a. Calculate the cost of not taking a cash discount. (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) ences Cost of not taking a cash discount 50.61% b. Calculate the effective rate of interest if the company borrows from the bank (Use a 360-day year. Do not round intermediate calculations, Input your answer as a percent rounded to 2 decimal places) Check my work SIRJE 4 that the company borrow from its bank at a stated rate of 17 percent. The bank requires a 27 percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement. a. Calculate the cost of not taking a cash discount. (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Cost of not taking a cash discount 50.61 % b. Calculate the effective rate of interest if the company borrows from the bank. (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest 0.19 % 0 Ext Dook Hint Print References Mc Graw HA