Lancaster Lumber buys $$8$ million of materials $($net of discounts$)$ on terms of $\frac{3}{5},$ net $35,$ and it currently

pays on the $5^{th}$ day and takes discounts. Lancaster plans to expand, which will require additional

financing. Assume $365$ days in year for your calculations.

If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer

completely. For example, $5$ million should be entered as $5,000,000.$ Do not round intermediate

calculations. Round your answer to the nearest cent.

$

What would be the nominal cost of that credit? Do not round intermediate calculations. Round your answer

to two decimal places.

$\%$

What would be the effective cost of that credit? Do not round intermediate calculations. Round your

answer to two decimal places.

$\%$

If the company could get the funds from a bank at a rate of $7\%,$ interest paid monthly, based on a $365-$

day year, what would be the effective cost of the bank loan? Do not round intermediate calculations.

Round your answer to two decimal places.

$\%$

Should Lancaster use bank debt or additional trade credit?