Question

Non-payment of debt on time results in ______.

Options

• Higher interest cost

• Loss of goodwill

• Fines and penalties

• All of the above

Answer 1

Non-payment of debt on time results in higher interest cost, loss of goodwill and fines and penalties.

Explanation:

• Higher interest cost: Delayed payments often attract higher interest rates or penalties.
• Loss of goodwill: Non-payment damages the company’s reputation among suppliers, creditors, and the public.
• Fines and penalties: The company may be liable for legal fines and additional penalties for breach of terms.