Jerry's Engineering has a three-year contract to construct a large piece of capital equipment for its client. The contract price is \($4\) million. At the end of the first financial year of the project, mate- rial, labour, and overheads charged to the job totalled \($850,000.\) Jerry estimates that a further \($2.65\) million will be required to complete the job. An independent evaluation has certified the value of the work completed as \($850,000,\) which the client has paid under the contract as a progress payment. The profit that Jerry can recognize as having been earned in the current year is

a. $500,000

b. $331,250

c. $121,500

d. None of the above