The contract price is $ 20million for both the building and thegarage, but Lupo

includes a price adjustment for early or late completion of the building. For each day before September1, 20252025, that the building iscompleted, the promised consideration will increase by $20,000. For each day after September1, 2025, that the building isincomplete, the promised consideration will be reduced by $20,000.

Dixon considers it 70% likely that it will complete the building seven daysearly, 10%

likely that it will complete the project ontime, and 20% likely that the project will be delayed five days. The building is constructed based on Lupo's specifications and would require extensive alterations if used by another entity. The transaction has commercialsubstance, and Lupo is in good financial health.

The parties have also agreed that the building will be inspected and assigned a green building certification level. If the building achieves the certification level specified in thecontract, Dixon will be entitled to a bonus of $ $240,000. Dixon has been highly successful in achieving certification on prior building projects.

How to determine the transaction price?

Answer rating: 100% (QA)

To determine the transaction price we need to consider the various factors mentioned in the given sc... View the full answer