Question: Wilco Inc. agrees to create a proprietary software application for Seminole Corporation. If the software is delivered on-time, Wilco will be paid $100,000. There is
Wilco Inc. agrees to create a proprietary software application for Seminole Corporation. If the software is delivered on-time, Wilco will be paid $100,000. There is a $10,000 penalty for each week that the software is delayed. Wilco estimates that there is an 80% chance that the software will be delivered on-time, 10% chance that it will be one week late, and 10% chance that it will be two weeks late. If Wilco recognizes income using the expected value approach, how much revenue should Wilco recognize? $90,000 $97,000 $97,500 Some other answer $100,000
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
