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...

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. $200,000

      (b)             What is the effective rate of interest if the firm decides to take the cash discount by borrowing money on a discount basis?