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Aztec Company contracted with the Kirk Company to review their revenue recognition policies for recording sales. The contract will pay Aztec $900,000 in the form
Aztec Company contracted with the Kirk Company to review their revenue recognition policies for recording sales. The contract will pay Aztec
$900,000
in the form of a fixed fee. Aztec will also receive $150,000 additionally if Kirk achieves $200,000 in additional revenues. Aztec estimates a
65%
chance that Kirk Company will achieve $200,000 in additional revenues. Refer to Aztec Company. Assume that Aztec estimates that the transaction price is the most likely value. The transaction price is ________.
A.
$1,050,000
B.
$997,500
C.
$900,000
D.
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