On June 10, 2014 Thetford Builders, Inc., a publicly traded company, announced that it had been awarded a contract to build a football stadium at a contract price of $500 million. This contract would increase its projected revenues by 25% over the next three years. Which of the following statements is correct in regards to this announcement?
A) The market price of Thetford's stock will probably be higher on June 11, 2014 than on June 10.
B) Thetford's net cash flow from operations will increase by 25% over the next three years.
C) Thetford's total assets should be increased by $500 million on June 10, 2014 to recognize this contract.
D) Thetford's net income will increase by 25% over the next three years.
Correct Answer:
Verified
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