An entity has been sued to court for its patent. The lawyers believed that there is a 60% chance that the court will not dismiss the case. There is a 30% chance the entity will be required to pay damages of 2,000,000 and a 70% chance that the damages will be 1,000,000. A 10 % risk adjustment factor is considered appropriate. Determine the estimated amount of provision.

An entity has been sued to court for its patent. The lawyers believed that there is a 60% chance that the court will not dismiss the case. There is a 30% chance the entity will be required to pay damages of 2,000,000 and a 70% chance that the damages will be 1,000,000. A 10 % risk adjustment factor is considered appropriate. Determine the estimated amount of provision.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.