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Sergio039 [100]
2 years ago
8

g Marlboro Construction enters into a contract with a customer to build a warehouse for $725,000 on April 15, 2021 with a comple

tion date of September 15, 2021. The contract contains a performance clause such that Marlboro will receive a $12,000 bonus for each week the contract is completed early. Likewise, the agreed contract price will be reduced by $12,000 for each week the contract is completed after the due date. These clauses are commonly included in Marlboro contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability September 1 10% September 8 30% September 15 25% September 22 20% September 29 15% The transaction price for this transaction, using the most likely amount method is A. $471,250 B. $725,000 C. $737,000 D. $713,000
Business
1 answer:
Nookie1986 [14]2 years ago
8 0

Answer:

B. $725,000

Explanation:

The expected value for the contract will be :

10% ($725,000 + 12,000 + 12,000 ) + 30% ($725,000 + 12,000 ) + 25% ($725,000 ) + 20% ($725,000 - 12,000 ) + 15% ($725,000 - 12,000 - 12,000 )

= $ 74,900 + $221,100 +$181,250 + $142,600 + $105,150 = $725,000

Marlboro constructions expected value of the contract is 725,000 based on the given probability estimates of contract completion.

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4 0
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ValentinkaMS [17]

Answer:

B.enables production to be ahead of demand.

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<em>One of the benefits of a wholesale warehouse in the chain of distribution is that it </em><em>enables production to be ahead of demand</em><em>.</em>

A warehouse generally represents a large house where goods/products are kept prior to their distribution for sale.

The use of a warehouse offers several advantages to producers. These include:

  • adequate protection and preservation of products
  • regular flow of goods irrespective of their period of production
  • continuity in the production process in order to stay ahead of market demand
  • easy handling of products
  • etc.

<em>Hence, the correct option is B.</em>

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