Jackson Construction Company has entered into a contract to build a new office building for Travis Corporation. The contract price is
$2 million with a performance bonus that Jackson will receive an additional $100,000 if the project is completed by June 30, 20X1. For
each week the deadline is not met, the performance bonus decreases by $10,000. Jackson has experience with similar contracts that
management believes are predictive for this contract. Jackson estimates that there is 50% probability that the contract will be
completed on time, a 30% probability that it will be completed one week late, and a 20% probability that the project will be completed
two weeks late. What is the transaction price for this contract?
? $2,093,000
? $2,095,000
? $2,000,000
? $2,100,000
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