Medident, Inc., a pharmaceutical distributor, does not take advantage of the trade credit discount of 3/15; net
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Question:
Medident, Inc., a pharmaceutical distributor, does not take advantage of the trade credit discount of 3/15; net 30 offered by its suppliers. Instead, the company's policy is to actually pay its invoices in 46 days given that its suppliers do not impose any penalties or late payment fees on the company. Under these circumstances, what is Medident's actual cost (APR) of not taking the discounts for early payment? Assume, as in the general formula of the previous page, that the year has 365 days.
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