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Kwen Enterprises, a Public Company, Has Been Hired by the New

question 56

Essay

Kwen Enterprises, a public company, has been hired by the new government of North Mokar to build a small airport with two runways for commercial use.North Mokar is a small country in Africa that has just elected its first democratic government.Kwen has agreed to the project, although they fear that if rebels overtake the new government, the airport will be used for military purposes and any outstanding amounts owing might not be paid.Kwen planned to complete the project as quickly as possible and has prepared the estimates below.They have a lot of experience in building similar projects elsewhere, so they are confident with their cost estimates and their ability to complete the project on time. $\begin{array}{lll}&\text { Costs } & \text { Billings to government } \\1^{\text {st }} \text { year } & \$ 1,750,000 & \$ 2,000,000 \\2^{\text {nd }} \text { yea } & \$ 1,550,000 & \$ 1,700,000\end{array}$ Required:
A) Compute the revenue and expenses for each year using the percentage-of-completion method.B) Compute the revenue and expenses for each year using the cost recovery method.
C) What facts would make you recommend the use of the percentage-of-completion method for this project? D) What facts would make you recommend the use of the cost recovery method for this project?
E) Which method should Kwen use?

Definitions:

Identification

A psychological process in which children try to look, act, feel, and be like significant people in their social environment.

Sex Roles

The set of societal norms dictating the behaviors that are considered appropriate for individuals based on their biological sex.

Cognition

The mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Socialization

The process through which individuals learn and internalize the norms, values, and behaviors appropriate to their society.