Question: Answer the following questions Provide explanations for each a A

Answer the following questions. Provide explanations for each:
a. A customer purchases $20,000 of goods. The goods will be paid for in cash in three years. How much revenue should be recorded on the date the goods are delivered, assuming a discount rate of 8 percent?
b. Would you pay $7,000 for an investment opportunity that will pay you $4,000 in one year, $3,000 in two years, and $2,000 in three years, if your discount rate is 12 percent?
c. A "zero coupon bond" is a type of long-term debt that pays no interest, but simply pays a single amount on the date the bond matures. Your broker offers you a zero coupon bond that will pay $5,000 in 20 years. How much would you pay for the bond today, if your discount rate is 10 percent?
d. At a discount rate of 8 percent, what is the maximum you would pay for an investment that will pay you $6,000 in one year, $4,000 in two years, and $8,000 in three years?
e. If your discount rate is 10 percent, would you prefer $10,000 today or $15,000 in five years?



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  • CreatedFebruary 26, 2015
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