Ottawa Power Tune Inc. is a vehicle tuning franchise. Franchise customers pay the company $20,000 cash in advance for each franchise. Ottawa Power Tune estimates that the customers take, on average, four years to become viable and that the amount of the fee earned in terms of cash costs and services provided in that time averages 40% in the first year, 30% in the second year and 15% in each of the third and fourth years. On average, the cash expenses of helping each franchise to become viable amount to $2,000 in year 1,$5,000 in year 2,$2,000 in year 3 and $1,000 in year 4. If Ottawa Power Tune recognizes revenues as cash is received, this is appropriate, because the company has received cash and it cannot be reclaimed inappropriate, because costs cannot have been matched with revenues inappropriate because this method is too conservative appropriate, because it gives a correct matching of income and cash flows