On June 10, Year 1, Burton 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 20% over the next three years. Which of the following statements is correct with regard to this announcement?
A. Burton's net income will increase by 20% over the next three years.
B. The market price of Burton's stock will probably be higher on June 11, Year 1 than on June 10th.
C. Burton's assets should be increased by $500 million on June 10, Year 1 to recognize this contract.
D. Burton's net cash flow from operations will increase by 20% over the next three years.
Answer: B
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