On 1 January 2017, Peter Ltd signed a contract worth $128 000 000 to construct a basketball stadium. The stadium was to be built over three years, with progress payments as follows:

$

31 Dec 2017 $30 000 000

31 Dec 2018 $40 000 000

31 Dec 2019 $58 000 000

If the cost of the stadium was estimated as:

$

31-Dec-17 $23,000,000

31-Dec-18 $26,285,714

31-Dec-19 $16,428,571

TOTAL COSTS $65,714,286

The project was 35% completed at the end of 2017, 75% completed at the end of 2018 and 100% completed at the end of 2019. Revenues and costs were as estimated. What profit was earned during 2019 if the percentage of completion method was used?

Select one:

a.$7 000 000

b.$11 200 000

c.$12 687 500

d.$28 000 000

e.$0