Jeff Heun, president of Sheridan Always, agrees to construct a concrete cart path at Dakota Golf Club. Sheridan Always enters into a contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $38,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,700 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 25% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
Jeff Heun, president of Sheridan Always, agrees to construct a concrete cart path at Dakota Golf Club. Sheridan Always enters into a contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $38,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,700 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 25% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Jeff Heun, president of Sheridan Always, agrees to construct a concrete cart path at Dakota Golf Club. Sheridan Always enters into a contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $38,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,700 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 25% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late.
(a)
Your answer is incorrect.
Determine the transaction price that Sheridan Always should compute for this agreement.
| Transaction Price | $enter the transaction price that Sheridan Always should compute for this agreemen |
Transcribed Image Text:Current Attempt in Progress
Jeff Heun, president of Sheridan Always, agrees to construct a concrete cart path at Dakota Golf Club. Sheridan Always enters into a
contract with Dakota to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $38,800 will be
paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The
performance bonus decreases by $9,700 per week for every week beyond the agreed-upon completion date. Jeff has been involved in
a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will
receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there
is 55% probability that he will complete the project on time, a 25% probability that he will be 1 week late, and a 20% probability that
he will be 2 weeks late.
(a)
* Your answer is incorrect.
Determine the transaction price that Sheridan Always should compute for this agreement.
Transaction Price $
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