Butcher Corporation had $4,000,000 of sales during the last 12 months, its latest accounts receivable balance was $500,000, it allows customers 40 days to pay for purchases, and it does not offer discounts. Which of the following statements is correct using a 365-day year?

a. We would need more information to determine whether or not Butchers customers pay on time.

b. On average, Butcher's customers do pay on time. We know this because it allows 40 days for payment and its DSO is only 20.6 days.

c. On average, Butcher's customers do not pay on time. We know this because it allows 40 days for payment yet its DSO is 45.6 days.