Anomaly - Discount on Order

Hi John Sir, I have a doubt in the way an answer has been worked out in BPP revision kit. My doubt is though the question is silent, a 2 per cent discount on order is being taken also on Annual holding cost. I dint understand the logic.( Question 6.19) The Question Purchase Price $25 p.u Annual Demand 1800 units Ordering cost $ 32 Annual Holding Cost $ 4.50 EOQ 160 Units What is the minimum total cost assuming a discount of 2% given on orders of 300 and over ? Options B 44 953.5 D 44 967 My Doubt : I got answer as D while BPP solution states as B, On further investigation i found out BPP did Holding Cost for 1 unit of Inventory for 1 year $ 4.50 * 98% = $4.41 I did not understand the logic of taking 98% of Holding Cost. Though i went thru u r lecture in quite depth and understand that holding cost does include a part of cost of financing the purchase and subsequent blocking of funds however holding cost also includes couple of other costs like actual warehouse rent etc which is not a factor of the price at which you purchased and so the discount. Can you kindly clarify how safely the assumption of entire 2 per cent discount is being conveniently passed on to holding cost in these workings by BPP Thanks a Ton Amit