Rivière SA estimates at 6,050 the claims it will pay in two years and at 1,100 the administration costs it will pay in one year, on a group of contracts. Case data: the discount rate reflecting the time value of money is 10 % (management's judgement, a rate not imposed by the standard). Calculate the present value of the claims and that of the costs, one flow at a time.
- Claims to be paid in two years
- 6,050
- Administration costs to be paid in one year
- 1,100
- Discount rate (case data)
- 10 %