Why we can't simply compare 27.86% and 14.91% right here for choosing supplies A or B?

Question 2 Two suppliers sell the same goods at the same prices, but under different credit terms. Supplier offers credit terms of 2/15, net 45, whereas Supplier B offers credit terms of 3/10, net 90. The company can borrow from a bank at an effective annual interest rate of 10 percent. Which of the following would be best for the company to do? [For simplicity, always Assume $100 purchase.] (a) Purchase from Supplier A and pay on Day 45. (b) Purchase from Supplier A, pay on Day 15, and borrow any money needed from the bank. (c) Purchase from Supplier B and pay on Day 90. (d) Purchase from Supplier B, pay on Day 10, and borrow any money needed from the bank. (a) or (b): COMPARE Cost of missing the discount (EAR) VS. 0 % EA 365 EAR = (It q ) 30 = 0.2786 [ 45-15 Thus, Pay on Pay It because 27.86 % > D' (c) or (d): COMPARE Cost of Missing the Discount (EAR) vs. 10% (EAR). 3 365 EAR = 80 = 0.1491 [ Jo-LD Thus, Borrow and Pay on Day 10 because 10% (Cost of Borrowing)