The Reynolds Company buys from iss suppliers on terims of 410 , net 60 . Aeynolds has not been utiliaing the discount offered and has been taking 72 days to pay its bils. The suppliers seem to accept this payment pattern, and Reynold's credil rating has not been hurt. Mr. Duke, Reynolds Campariy's vice-president, has suggested that the comparry begin to take the discount olfered: Mc. Duke proposes the compsny borrow from its bark at a stated rate of 12 percent. The bank fequires a 10 percent compensating balance on these loans Current account balances would not be available to meet any of this tequired compensating balance. a. Calculate the cost of not taking a cash discount. (Use 365 days in a year. Do not round intermedlate calculations. Round the final answer to 2 decimal places.) Cost of not taking a cash discount b. Calculate the annual rate of interest if the conpany borrow from the bank. (Use 365 days in a year. Do not round intermediate calculations, Pound the final answer to 2 decimal places.) Annual rale of laterest c. Do you agree with Mr. Duke's proposal? Yes No