How much is the service revenue recognize on Year 9a. 28b. 60c. 39d. 80e. zero As consideration, the government pays the operator PSOM per year in Years 3 to 10. FFC makes the following estimates atcontract inception:ContractStand-aloneYearselling priceForecast cost + 20%Forecast cost+ 20%costsConstruction services1P5050Operation servicesReconditioning3-1020Forecast cost + 40%9.10Forecast cost + 10%All cash flows are assumed to take place at the end of the year. FFC determines that the implied interest rate in thecontract is 33.05%.

The revenue recognized is the amount that has been recognized in the financial statement of the…

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Business

Accounting

How much is the service revenue recognize on Year 9 a. 28 b. 60 c. 39 d. 80 e. zero

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EA: Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and...

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