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 bill on the last day before late penalties are charged. These customers apparently understand the

Answer 1

the time value of money.

Step-by-step explanation:

The time value of money is a concept that states that money held today is worth more than more held tomorrow or at any future date.

Money has the capacity of earning interest or some other type of return, that is why money paid in the future should account for the lost interest revenue.

Rock's clients understand that if they wait to pay until the last possible date, they can use the money to generate some type of gain.