The Hawk Corporation builds yachts. The vessels it currently produces are practically identical and are completed in approximately 8 months. A customer has approached Hawk about constructing a larger yacht that would take approximately 15 months to complete. What are the tax implications of accepting the contract proposal?

To fully answer this question, please address the following in your post.

1. What is the definition of a long-term contract?
2. Which long-term contract method is required to be used by tax regulations?
3. What is the process used to compute income using the required method?