Question: Gardi Inc sold a unit of inventory to a buyer
Gardi Inc. sold a unit of inventory to a buyer for $1,000 payable in one year. Gardi estimates that the interest rate for a similar financing arrangement would be 8%. The unit of inventory normally sells for $900. Calculate the discount rate to be applied in calculating the cash selling price of the unit of inventory. Gardi prepares financial statements in accordance with IFRS.
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