Binco Brass Corp. ​(BBC​) is a wholesaler that sells musical instruments to retailers. On February 1 of the current​ year, BBC contracts with Music ​Extravaganza, Inc. ​(MEI​) to sell 1,000 trumpets to MEI with delivery scheduled for the month of February. The contract price is $500 per trumpet.​ However, the contract includes the possibility of a volume discount if total annual purchases exceed a given amount. These discounts are as​ follows: If Total Sales Equal or Exceed Discount Percentage   $1,000,000 1%   $2,000,000 2%   $5,000,000 5%   These discounts are retroactive—once a volume trigger is​ met, BBC refunds to MEI amounts on previous purchases. BBC believes that it is 15% likely that it will not contract with MEI again this year. BBC believes the following probability estimates are​ accurate: Total Sales Probability $500,000 15% $1,000,000 60% $2,000,000 20% $5,000,000 5%

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Binco Brass Corp. ​(BBC​) is a wholesaler that sells musical instruments to retailers. On February 1 of the current​ year, BBC contracts with Music ​Extravaganza, Inc. ​(MEI​) to sell 1,000 trumpets to MEI with delivery scheduled for the month of February. The contract price is $500 per trumpet.​ However, the contract includes the possibility of a volume discount if total annual purchases exceed a given amount. These discounts are as​ follows:

If Total Sales Equal or Exceed
Discount Percentage
 
$1,000,000
1%
 
$2,000,000
2%
 
$5,000,000
5%
 
These discounts are retroactive—once a volume trigger is​ met, BBC refunds to MEI amounts on previous purchases. BBC believes that it is 15% likely that it will not contract with MEI again this year. BBC believes the following probability estimates are​ accurate:
Total Sales
Probability
$500,000
15%
$1,000,000
60%
$2,000,000
20%
$5,000,000
5%




Using the​ expected-value approach, what is the estimate of the consideration amount in this​ contract?

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