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Simmons Corp. can borrow from its bank at 13 percent to take a cash discount. The terms of the cash discount are 2.5/16, net 90.

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Simmons Corp. can borrow from its bank at 13 percent to take a cash discount. The terms of the cash discount are 2.5/16, net 90. a. Compute the cost of not taking the cash discount. (Use a 360-day year. Do not round intermediate calculations. Input your final answ places.) Cost of not taking a cash discount b. Should the firm borrow the funds? OYes No

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