11. [Effect of revenue recognition methods on bonus] The Kwai Co. has obtained a contract to build a bridge over the Celluloid River. The bridge will take three years to construct and will re- quire Kwai cash outflows of $1.0 million, 50.5 million, and $0 5 million in years 1, 2, and 3, respectively. Kwai will receive the $3 million contract price in three equal installments of SI mil- lion. As manager of this project, you have three revenue recogni- tion choices (i) Completed contract (ii) Percentage-of-completion (iii) Installment basis

a. Assume that your objective is to maximize the present value (the discount rate is 12%) of your bonus. Bonus payments are