Simple Simon's Bakery purchases supplies on terms of 1.7/10 , net 30. If Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon's owner an interest rate of 11.8% on borrowed funds. Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Hint: Use 365 days for a year.)

The cost of forgoing the discount is __%.

(Round to one decimal place.)

Part 2

Should Simple Simon's enter the loan agreement with the bank and begin taking the discount?(Select the best choice below.)

A.

Simple Simon's should enter into the loan agreement but not begin taking the discount.

B.

Need more information to answer the question.

C.

Simple Simon's should not enter into the loan agreement but should begin taking the discount.

D.

Simple Simon's should enter into the loan agreement with the bank and begin taking the discount.