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.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...

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