In Year 1 a Contractor Agrees to Build a Building

question 75

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 2 is

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

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Definitions:

Evaluative Belief

A judgment or assessment about the value or worth of something, based on criteria or standards.

Foundational Belief

Core convictions or assumptions that are deeply held and form the basis for an individual's worldview or philosophy.

Primitive Belief

A belief based on our own personal experience or from a credible authority.

Heuristic

A mental shortcut that allows people to solve problems and make judgments quickly and efficiently.