Brunetti Co

question 110

Essay

Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's contract specifies that it will receive a flat fee of $15,000 for providing the customized signs, and an additional $1,000 if 30% of Di Antonio's new customers indicate they first learned of Di Antonio because of the signs. Based on historical experience, Brunetti estimates that there is a 90% chance it will achieve the threshold to receive a bonus.
-Assume Brunetti uses the "expected value" approach, but is very uncertain of that estimate due to a lack of experience with similar arrangements. What would be the appropriate transaction price?

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Definitions:

PACER

An electronic public access service that allows users to obtain case and docket information from federal appellate, district, and bankruptcy courts.

Federal Judiciary

The branch of the U.S. government responsible for interpreting the law, consisting of the Supreme Court and other federal courts.

Federal Case Dockets

Official summaries of proceedings and filings in federal court cases.

Perfect Price Discrimination

A pricing strategy where a seller charges each buyer their maximum willingness to pay, extracting all the consumer surplus.