Question

Rock Solid Concrete Company does not offer customers a cash discount for early payment of their accounts receivable. As a result, most customers wait to pay their bills on the last day before late penalties are charged. These customers apparently understand the

a. government's regulations of the chemical industry.

b. financial community's perception of equity financing.

c. benefits of tax-deductible expenses.

d. time value of money.

Answer 1

The correct answer is the option D: Time value of money.

Step-by-step explanation:

To begin with, due to the fact that Rock Solid Concrete Company does not offer customers a cash discount for early payment then it is quite obvious that their customers will try to wait to pay their bills on the last day because in that way they will be able of having that money availabe for any issues or inconveniences that could occur during those first days, therefore that those customers apparently understand the importance of time value of the money because if the pay early they will lose that cash and would not have it for any urgencies.