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2. AG Construction enters into a contract with a customer to build a new headquarters facility for $1,000,000 on January 1,2023 with a performance bonus

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2. AG Construction enters into a contract with a customer to build a new headquarters facility for $1,000,000 on January 1,2023 with a performance bonus of $100,000 if the building is completed by July 31,2023 . The bonus is reduced by $20,000 each week that completion is delayed. AG commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2023 65\% August 7, 2023 25\% August 14, 20235% August 21, 20235% a. Calculate the contract price for AG using the probability-weighted (expected value) method. b. Assume that AG can only determine the probabilities of completing the project by July 31(65%) or not meeting the deadline ( 35%). Calculate the contract price under this scenario

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