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Assume that John William has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 93% and otherwise it will be finished 1 week late, determine the transaction price. Transaction price $

Assume that John William has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 93% and otherwise it will be finished 1 week late, determine the transaction price. Transaction price $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Current Attempt in Progress John William, president of Crane Always, agrees to construct a concrete cart path at Windsor Golf Club. Crane Always enters into a contract with Windsor to construct the path for $212,000. In addition, as part of the contract, a performance bonus of $46,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $11,700 per week for every week beyond the agreed-upon completion date. John has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. John estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
Transcribed Image Text:Current Attempt in Progress John William, president of Crane Always, agrees to construct a concrete cart path at Windsor Golf Club. Crane Always enters into a contract with Windsor to construct the path for $212,000. In addition, as part of the contract, a performance bonus of $46,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $11,700 per week for every week beyond the agreed-upon completion date. John has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. John estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
(b) List of Accounts Assume that John William has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 93% and otherwise it will be finished 1 week late, determine the transaction price. Transaction price Attempts: 2 of 3 used $
Transcribed Image Text:(b) List of Accounts Assume that John William has reviewed his work schedule and decided that it makes sense to complete this project on time. Assuming that he now believes that the probability for completing the project on time is 93% and otherwise it will be finished 1 week late, determine the transaction price. Transaction price Attempts: 2 of 3 used $
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