Question: Asahi Technology has a contract to build a network for a customer for a total sales price of epsilon10 million. The network will take an

 Asahi Technology has a contract to build a network for a

Asahi Technology has a contract to build a network for a customer for a total sales price of epsilon10 million. The network will take an estimated three years to build, and total building costs are estimated to be epsilon 6 million. Asahi recognizes long-term contract revenue using the percentage-of-completion method and estimates percentage complete based on expenditure incurred as a percentage of total estimated expenditures. At the end of Year 1, the company had spent epsilon 3 million. Total costs to complete are estimated to be another epsilon 3 million. At the end of Year 2, the company had spent an additional epsilon 2 million for an accumulated total of epsilon 5 million. Total costs to complete are estimated to be another epsilon 1.25 million. At the end of Year 3, the contract is complete. The company spent an accumulated total of epsilon 6.4 million. How much revenue will Asahi recognize in Year 2

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