Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. gary smith, president of cullumber always, agrees

Gary Smith, president of Cullumber Always, agrees to construct a concrete cart path at ivanhoe...

70.2K

Verified Solution

Question

Accounting

image
Gary Smith, president of Cullumber Always, agrees to construct a concrete cart path at ivanhoe Golf Club. Cullumber Always enters into a contract with lvanhoe to construct the path for $195,000. In addition, as part of the contract, a performance bonus of $44,000 will be paid based on the timing of completion. The performance bomus will be paid fully if cornpleted by the agreed-upon date. The performance bonus decreases by $11,000 per week for every week beyond the agreed-upon completion date. Gary 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. Gary 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

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students