This Year,a Contractor Agrees to Build a Building for $2,000,000,which

question 111

Multiple Choice

This year,a contractor agrees to build a building for $2,000,000,which will be completed by the end of next year.The builder's cost is estimated to be $1,700,000.The actual costs this year are $800,000 and next year's actual costs are $800,000.If the tax rate is 20% and the interest rate is 10%,the look back interest for the percentage of completion method is

• A)$ 0.
• B)$1,176.
• C)$2,000.
• D)$6,000.

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Definitions:

Autarky

An economic policy or situation in which a country is self-sufficient and does not engage in international trade.

Cattle

Large domesticated bovines raised for their meat, milk, or hides, but in economic context, it broadly relates to agricultural commodities.

Opportunity Cost

The expense incurred by not selecting the second-best choice while deciding or preferring one option to another.

Cars

Motor vehicles with four wheels, primarily used for transporting people rather than goods.