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Question · Significant financing component

Castagnède sells a machine payable 3 years after delivery and has concluded that there is a significant financing component. The available data are: risk-free rate 2%, Castagnède's borrowing rate 4%, rate at which Castagnède would separately finance this customer given its credit risk and the collateral provided 7%, promotional rate shown in the brochure 0%. Which rate should be used to adjust the consideration?

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