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Discuss the target and calculates the contract price

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Reference no: EM131805030

On January 1 Revis Consulting entered into a contract to complete a cost reduction program for Green Financial over a six-month period. Revis will receive $60,800 from Green at the end of each month. If total cost savings reach a specific target, Revis will receive an additional $30,400 from Green at the end of the contract, but if total cost savings fall short, Revis will refund $30,400 to Green. Revis estimates an 80% chance that cost savings will reach the target and calculates the contract price based on the expected value of future payments to be received.

Reference no: EM131805030

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