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RomeoConstruction enters into a contract with a customer to build a warehouse for $800,000 on March 30, 2014 with an additional performance bonus of $50,000

RomeoConstruction enters into a contract with a customer to build a warehouse for $800,000 on March 30, 2014 with an additional performance bonus of $50,000 if the building is completed by July 31, 2014. The bonus is reduced by $10,000 each week that completion is delayed. Romeo commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:

July 31, 2014 : 70%

August 7, 2014: 30%

The transaction price for this transaction, based on most likely outcome, is

a) 847,000

b) 835,000

c) 850,000

d) 800,000

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