How to get the Consideration Amount for the 1600 trumpets?

%EP8-6 (similar to) 13 Question Help Plummer Brass Corp. (PBC) is a wholesaler that sells musical instruments to retailers. On February 1 of the current year, PBC contracts with Adele Extravaganza, Inc. (AEI) to sell 1,600 trumpets to AEl with delivery scheduled for the month of February. The contract price is $800 per trumpet. However, the contract includes the possibility of a volume discount if total annual purchases exceed a given amount. These discounts are as follows: B Click the icon to view the discount percentage.) These discounts are retroactive-once a volume trigger is met, PBC refunds to AEl amounts on previous purchases. PBC believes that it is 15% likely that it will not contract with AEl again this year. PBC believes the following probability estimates are accurate: (Click the icon to view the probability estimates.) Using the expected-value approach, what is the estimate of the consideration amount in this contract? (Enter a "0" for any zero values.) Total Annual Discount Percentage Sales 0 S S $ 1,280,000 1,580,000 2,380,000 4,880,000 Consideration Amount for the 1,600 Trumpets 1,280,000 1,228,800 1,203,200 1,190,400 Probability 15 % 45 20 Expected Consideration $ 192,000 552,960 240,640 238,080 $ 1,223,680 S 7 %EP8-6 (similar to) 13 Question Help Plummer Brass Corp. (PBC) is a wholesaler that sells musical instruments to retailers. On February 1 of the current year, PBC contracts with Adele Extravaganza, Inc. (AEI) to sell 1,600 trumpets to AEl with delivery scheduled for the month of February. The contract price is $800 per trumpet. However, the contract includes the possibility of a volume discount if total annual purchases exceed a given amount. These discounts are as follows: B Click the icon to view the discount percentage.) These discounts are retroactive-once a volume trigger is met, PBC refunds to AEl amounts on previous purchases. PBC believes that it is 15% likely that it will not contract with AEl again this year. PBC believes the following probability estimates are accurate: (Click the icon to view the probability estimates.) Using the expected-value approach, what is the estimate of the consideration amount in this contract? (Enter a "0" for any zero values.) Total Annual Discount Percentage Sales 0 S S $ 1,280,000 1,580,000 2,380,000 4,880,000 Consideration Amount for the 1,600 Trumpets 1,280,000 1,228,800 1,203,200 1,190,400 Probability 15 % 45 20 Expected Consideration $ 192,000 552,960 240,640 238,080 $ 1,223,680 S 7