The Reynolds Corporation buys from its suppliers on terms of 3/18, net 65 . Reynolds has not been utilizing the discounts offered and has been taking 65 days to pay its bilis. Ms. Duke, Reynoids Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of 18 percent. The bark requires a 14 percent compensating balance on these loans. Current account balances would not be avalable to meet any of this compensating balance requirement. a. Calculate the cost of not taking a cash discount. (Use a 360-day year. Do not round intermediote calculations. Input your answer as a percent rounded to 2 decimal ploces.) b. What is the effective rate of interest on the bank ioan? (Use a 360 -day yeac, Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal ploces.) c. Do you agree with Duke's proposal? Yes No