Apricot, Inc purchased a new machine on November 1, 2017 for $1,000,000 on credit. The supplier has offered Apricot terms of 2/10, net 45. The bank has a current interest rate of 16 percent.  Assume a 365 day year. a)         Compute the cost of giving up cash discount. What is the effective rate of interest if the firm decides to take the cash discount by borrowing money on a discount basis?

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