QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

64. A company entered into a three-year construction project with a total contract price of $10.6 million and an expected total cost of $8.8 million. The following table provides cash flow information relating to the contract: All figures in millions Year 1 Year 2 Year 3Costs incurred and paid $1.2 $6.0 $1.6Amounts billed and payments received $2.4 $5.6 $2.6If the company uses the percentage-of-completion method, the amount of revenue recognized (in millions) in Year 2 is closest to: A. $3.5. B. $5.6. C. $7.2.