Moonshine company has two invoices, both dated at August 25, that need to be paid. The company's cost of short-term financing is 17% and the credit terms for the two invoices are as follows.

1.1,5/10 net 60 EOM

2.3/7 net 45 date of invoice

Required (10pt)

1.Calculate the cost of giving up the discount for each invoice. Assume a 365 day year.

2.Indicate for each invoice if Moonshine company should give up the cash discount or not.