chanel2013
16.04.2020 •
Business
Novak Corp. enters into a contract with a customer to build an apartment building for $1,045,500. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $139,800 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $46,600 each week that completion is delayed. Novak commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability August 1, 2021 70 % August 8, 2021 20 August 15, 2021 5 After August 15, 2021 5 Determine the transaction price for this contract.
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