Sanjeev Enters into a Contract Offering Uncertain Consideration

question 184

Multiple Choice

Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $2,000, and a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev estimates uncertain consideration using the probability-weighted amount. What is the amount of revenue Sanjeev would recognize for the first month of the contract?

• A)$0.
• B)$1,000.
• C)$1,333.
• D)$1,400.

---

Definitions:

External Dimensions

Factors outside an individual or organization that can affect performance, strategy, or operations, such as economic conditions, societal trends, or technological advancements.

Candor

The quality of being open, honest, and straightforward in expression.

Risk Taking

The act of engaging in actions or decisions that involve uncertainty and the potential for negative outcomes in hopes of achieving beneficial results.

Reforming

The process of making changes to something with the intention of improving it.