Consider a One-Year Discount Bond That Has a Present Value

question 59

Short Answer

Consider a one-year discount bond that has a present value of $3,000.If the annual rate of discount is 5 percent, calculate the future value of the bond (the amount the bond pays in one year).

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Definitions:

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or completion, used primarily in inventory valuation and accounts receivable.

Historical Cost

Historical cost is the original monetary value of an economic item purchased or incurred, used as a basis for accounting and financial reporting.

Replacement Cost

The current cost of replacing an asset with a similar one at its current market price.

Reorganization

A process aimed at restructuring a company's financial or operational aspects for efficiency or to facilitate a smoother operation.