On 1 January 20X1, Sabarthès delivers a bottling line to the cooperative Vinsobres, which will pay 266,200 at the end of a 3 years-year credit period. The contract contains a significant financing component. The rate at which Sabarthès would separately finance Vinsobres is 10%; the risk-free rate is 3% (case data). Interest is computed on each year's opening balance (teaching assumption). Compute the revenue from the delivery and the interest income for 20X2.
- Price payable later
- 266,200
- Credit period
- 3
- Rate of a separate financing transaction with the customer
- 10 %
- Risk-free rate
- 3 %