What Is the Present Value of $11,463 to Be Received

question 84

Multiple Choice

What is the present value of $11,463 to be received 7 years from today? Assume a discount rate of 3.5% compounded annually and round to the nearest $1.

• A) $5,790
• B) $6,508
• C) $7,210
• D) $9,010

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Definitions:

Revenue Recognition

The accounting principle that dictates the specific conditions under which income becomes recognized as revenue.

Revenue Recognition Principle

An accounting principle that dictates the conditions under which revenue is recognized and recorded.

Performance Obligations

Promises in a contract to transfer goods or services to a customer, central to revenue recognition principles.

Transaction Price

The total monetary value exchanged or agreed upon in a transaction.