Nash Corp. enters into a contract with a customer to build an apartment building for...
70.2K
Verified Solution
Link Copied!
Question
Finance
Nash Corp. enters into a contract with a customer to build an apartment building for $928,900. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $148,500 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $49,500 each week that completion is delayed. Nash commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes Completed by August 1, 2018 August 8, 2018 August 15, 2018 After August 15, 2018 6 Probability 70% 20 (a) Determine the transaction price for the contract, assuming Nash is only able to estimate whether the building can be completed by August 1, 2018, or not (Nash estimates that there is a 70% chance that the building will be completed by August i 2018 If answer is 0, p ease entero. Do noteave any fields bank.) Transaction Price 125730 (b Determine the transaction price for the contract, assuming Nash has l ited information wit 2018, deadline. (If answer is 0, please enter 0. Do not leave any fields blank.) h to deve a reliable estimate of completion the August Transaction Price
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!
