Big Telco Inc. is offering new phones for $200 to customers who also sign up for a three year voice and data plan. The fair value of each phone on a stand-alone basis is $1,000, and each phone costs Big Telco $600. The three year voice and data plan is charged to the customer at a price of $75 per month, which approximates its fair value.

 If Big Telco signs up a new customer, how much cumulative revenue should they have recognized after providing the voice and data service to the customer for one year? Big Telco is a publicly listed company. (Note: for simplicity, assume that discounting any future payments is not required for this question)

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To determine the cumulative revenue that Big Telco Inc should recognize after providing the vo... View the full answer