completed so far. It doe The Reynolds Company buys from its suppliers on terms of 4/10, net 51. Reynolds has not been utilizing the discount offered and has been taking 62 days to pay its bills. The suppliers seem to accept this payment pattern, and Reynold's credit rating has not been hurt Mr. Duke, Reynolds Company's vice-president, has suggested that the company begin to take the discount offered. Mr. Duke proposes che company borrow from its bank at a stated rate of 22 percent. The bank requires a 10 percent compensating balance on these oans. Current account balances would not be available to meet any of this required compensating balance. a. Calculate the cost of not taking a cash discount (Use 365 days in a year. Do not round intermediate calculations. Rould the final answer to 2 decimal places.) Cost of not taking a cash discount 37.09 % b. Calculate the annual rate of interest if the company borrows from the bank. (Use 365 days in a year. Do not round Intermediate calculations. Round the final answer to 2 decimal places.) Annual rate of interest 24.44 % E. Do you agree with Mr. Duke's proposal? Yes No