XYZ Ltd. has to rectify a serious fault in an item of plat that it has constructed for a customer. The most likely outcome is that the repair will succeed at the first attempt at a cost of 400,000, but there is a chance that a further attempt will be necessary, increasing the cost to 500,000. What amount of provision should XYZ Ltd. recognise?

• A

  400,000

• B

  The probability for the first attempt to be successful is needed to calculate the provision

  C

  500,000

• D

  Nil