Problem 163Cost of Trade Credit and Bank LoanLamar Lumber buys $8 million of materials (net of discounts) on terms of 3/5 net 30 and itcurrently pays after 5 days and takes discounts. Lamar plans to expand which will requireadditional financing. Assume 365 days in year for your calculations.a. If Lamar decides to forgo discounts how much additional credit could it obtain? Write outyour answer completely. For example 5 million should be entered as 5000000. Roundyour answer to the nearest cent.$ ?b. What would be the nominal cost of that credit? Round your answer to two decimal places.% ?c. What would be the effective cost of that credit? Round your answer to two decimal places.% ?d. If the company could get the funds from a bank at a rate of 10% interest paid monthlybased on a 365dayyear what would be the effective cost of the bank loan? Round youranswer to two decimal places.% ?e. Should Lamar use bank debt or ?