Tsung Company signs a contract to sell the use of its patented manufacturing technology to Herlitz Corp.

Question:

Tsung Company signs a contract to sell the use of its patented manufacturing technology to Herlitz Corp. for 12 years. The contract for this transaction stipulates that Herlitz Corp. pays Tsung $21,000 at the end of each year for the use of this technology. Using a discount rate of 4%, what is the value in use of the patented manufacturing technology?

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...