Yale case book wrong answer - would like to confirm

Question

Hi, There is a case on Yale case book, the answer says: "Our client will save $6,000/year in costs and suffer a maximum reduction of $1,500/year in profits. This is a net gain of $4,500/year". Just want to clarify this statement is wrong. The net gain should be 1500/year, not 4500/year.

Thanks

Freda

Answer 1

Hi Freda,

I disagree with your interpretation.

Look at both components individually:

If you save $6000 in costs, your net gain is $6k.

If you lose $1.5k in profits, your net loss is $1.5k.

Add both numbers and find the answer to be correct.

Best
Björn

Answer 2

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Answer 3

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Answer 4

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