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Question 3 The Dolce Company purchases raw materials on terms of 2/10, net 30. A review of the company's records by the owner, Mr. Gupta, revealed that payments are usually made 15 days after purchases are received. When asked why the firm did not take advantage of its discounts, the accountant, Mr. Ram, replied that it cost only 2 per cent for these funds, whereas a bank loan would cost the company 12 per cent. (a) What mistake is Ram making? (b) What is the real cost of not taking advantage of the discount? (c) If the firm could not borrow from the bank and was forced to resort to the use of trade credit funds, what suggestion might be made to Ram that would reduce the annual interest cost