Business, 12.03.2020 22:49 Victor3756
Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into a contract with Dakota to construct the path for $200,000. In addition, as part of the contract, a performance bonus of $40,000 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 $10,000 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 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late.
(a) Determine the transaction price that Concrete Always should compute for this agreement.
(b) Assume that Jeff Heun has reviewed his work schedule and decided that it makes sense to complete this project on
time. Assuming that he now believes that the probability for completing the project on time is 90% and otherwise it will
be finished 1 week late, determine the transaction price.
Answers: 3
Business, 22.06.2019 17:40, gabe2111
Take it all away has a cost of equity of 11.11 percent, a pretax cost of debt of 5.36 percent, and a tax rate of 40 percent. the company's capital structure consists of 67 percent debt on a book value basis, but debt is 33 percent of the company's value on a market value basis. what is the company's wacc
Answers: 2
Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Clu...
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