How much revenue does the firm recognize from the first year

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Reference no: EM133011199

A company sells equipment and service contracts. When purchased separately, the equipment costs $4,365 and a four-year service contract costs $8,057. When purchased together, the equipment cost is discounted 22% of the cost if purchased separately. They always deliver equipment the day it is sold.

Problem 1: How much revenue does the firm recognize from the first year of the service contract when it is sold together with equipment?

Group of answer choices

Option 1: $2,014

Option 2: $9,689

Option 3: $1,859

Option 4: $6,284

Reference no: EM133011199

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