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Hooper Inc. offers a discount on an extended warranty on its eyePhone when the warranty is purchased at the time the eyePhone is purchased. The
Hooper Inc. offers a discount on an extended warranty on its eyePhone when the warranty is purchased at the time the eyePhone is purchased. The warranty normally has a price of $300, but Hooper offers it for $240 when purchased along with an eyePhone. Hooper anticipates a 75% chance that a customer will purchase the extended warranty along with the eyePhone. Assume Hooper sells 1,000 eyePhones with the extended warranty discount offer. What is the total stand- alone selling price that Hooper would use for the extended warranty discount option for purposes of allocating revenue among the performance obligations in those 1,000 eyePhone contracts? A. $240,000 B. $60,000 C. $45,000 D. $0 O A U O 0
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