MarleConstructionentersintoacontractwithacustomertobuildawarehousefor$950,000onMarch 30, 2018 with a performance bonus of $50,000 if the building is completed by...
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MarleConstructionentersintoacontractwithacustomertobuildawarehousefor$950,000onMarch 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 completion is delayed. Marle commonly includes these
completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:
| Completed by | Probability |
| July 31, 2018 | 65% |
| August 7, 2018 | 25% |
| August 14, 2018 | 5% |
| August 21, 2018 | 5% |
The transaction price for this transaction is
A) $995,000
B) $950,000
C) $652,500
D) $685,000
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