The face value and present value of a long-term note receivable are always different and require present value techniques to calculate this difference.

Question

Quizplus · Accepted Answer

The face value and present value of a long-term note receivable may be the same if the note's interest rate is equal to the market rate at issuance. Present value techniques are used when the interest rate differs from the market rate.

The Face Value and Present Value of a Long-Term Note