Check my work 7 Problem 8-22 Bank loan to take cash discount (L08-1,8-2) The Reynolds Corporation buys from ts suppliers on terms of 3/18, net 55. Reynolds has not been utilizing the discounts offered and has been taking 55 days to pay its biis 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 18 percent. The bank requires a 23 percent compensating balance on these Tons. Current account balances would not be available to meet any of this compensating balance requirement 1.Cakulate the cost of not taking a cash discount. (Use a 360-day your. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Castel nottuning cash decount 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.) Electorate of more c. Do you agree wm Duke's proposal? M Graw