Nair Corp. enters into a contract with a customer to build an apartment building for ($1),000,000. The

Question:

Nair Corp. enters into a contract with a customer to build an apartment building for $$1$,000,000.

The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $$150$,000 to be paid if the building is ready for rental beginning August 1, 2015. The bonus is reduced by $$50$,000 each week that completion is delayed. Nair commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:

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