The expression "3/10, net 45" means that the customers receive a 3% discount if they pay within 10 days; otherwise, they must pay in full within 45 days.

What would the seller's cost of capital have to be in order for the discount to be cost justified?

1) 34.2857%

2) 35.2857%

3) 31.2857%

4) 30.2857%