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Business, 06.04.2020 16:29 expeditionofsin

Marle Construction enters into a contract with a customer to build a warehouse for $950,000 on March 30, 2018 with a performance bonus of $50,000 if the building is completed by July 31, 2018. The bonus is reduced by $10,000 each week that the building is delayed. Marle commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: 65% probability it will be completed by July 31, 2018 25% probability it will be completed by August 7, 2018 5% probability it will be completed by August 14, 2018 5% probability it will be completed by August 21, 2018. The transaction price for this transaction, based on the most likely outcome method, is:

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