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:

Construction Company

A business entity focused on the building of residential, commercial, or industrial structures, infrastructure projects, and associated activities.

Conditional Probabilities

The chances of an event's occurrence, predicated on the fact that another event has happened.

Bayes' Law

A theorem using probability to update predictions or beliefs in light of new evidence.

Probability Tree

A diagram that shows the possible outcomes of a series of related probabilities.