In Year 1 a Contractor Agrees to Build a Building

question 41

Multiple Choice

In year 1 a contractor agrees to build a building for $2,500,000 by the end of year 2.The builder's cost is estimated to be $1,800,000.The actual costs year 1 are $900,000 and year 2's actual costs are $1,300,000.Under the completed contract method,the gross profit for year 1 is

• A)$0.
• B)$300,000.
• C)$350,000.
• D)$700,000.

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Definitions:

Money Supply

The total amount of money available in an economy at a particular time.

Official Money Supply

The total amount of monetary assets available in an economy at a specific time, as measured and published by the central bank.

Precautionary Demand

The desire to hold cash or liquid assets as a safeguard against potential financial emergencies.

Speculative Demand

The demand for assets or goods not for their immediate consumption or use, but for the purpose of resale at a higher price in the future.