Section 2 Question 8 of 40 A company entered into a 100 million contract to

Section 2 question 8 of 40 a company entered into a

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Section 2Question8 of 40A company entered into a $100 million contract to build a new sports facility. Construction was 15% complete at the end of Year 1 and 65% complete at the end of Year 2. Just prior to the end of Year 2, however, the buyer requested some upgrades to the original contract (higher-quality exterior and interior finishing materials) and agreed to pay an extra $10 million for these changes. The project manager estimates that the expanded contract (including extras) is 60% complete. Under the converged revenue
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recognition standard issued by the International Accounting Standards Board and Financial Accounting Standards Board in May 2014, the amount of revenue that the company should recognize in Year 2 is closestto: $51 million.$50 million.$56 million. Question not answeredThe $10 million of upgrades is considered a modification of an existing contract. The company must reflect the effect of the modification on a cumulative catch-up basis. CFA Level I "Understanding Income Statements," Elaine Henry and Thomas R. Robinson Section 3.4 Question9 of 40A global equity investor makes investment decisions based on only the P/E. The average P/E of all global distribution:Earnings GrowthP/ELower third5%8Middle third10%15Top third8%25If the investor selects only stocks from the lower third of the distribution, it would be mostappropriate to classify the investor as a: Question not answeredThis investor is interested in undervalued stocks (stocks with below-average P/E) and thus is a value investor.
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CFA Level I “Financial Statement Analysis: Applications,” Thomas R. Robinson, Jan Hendrik van Greuning, Elaine Henry, and Michael A. Broihahn Section 5 Question10 of 40Which of the following is most likely a sign of inventory manipulation to improve reported financial results?
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