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This is not a question from bpp, so i will write just little part of it which is interesting to me:
“If contract did not go ahead, the coach would not be in use for 8 out of 10 days of the conference (job). For the other 2 days a contract has already been accepted which contains a significant penalty clause. This contract earns a contribution of 250$ per day. A replacement coach could be hired for 180$ per day.”
My question is, why 500$ contribution will not be included as a relevant cost. Isnt it a cost of lost opportunity?Because it is cheaper to hire a replacement coach and only pay $360 (in which case they will not lose the $500).
(If there was no mention of a replacement coach being available, then they would indeed lose $500 and it would then be a relevant cost.)
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