Port hired Builder to expand its existing container ship terminal to Port's specifications for $2,500,000, to serve as a terminal for larger containerships. Builder failed to follow Port's specifications regarding foundations, meaning that the terminal could not be expanded again (which was part of Port's long-term business plan).The cost to hire another contractor to fix the foundations to meet Port's specifications is $500,000.While the present value of the terminal is the same with or without the conforming foundations, the conforming foundations are estimated to reduce the cost of future expansion by at least $1,000,000.When Port sues Builder, Port will recover:

Question 7 options:

a)

all amounts paid to Builder, up to $2,500,000.

b)

all costs paid to fix the foundations.

c)

all costs paid to fix the foundations, because the cost of fixing the problem is less than the value of the conforming performance.

d)

none of the costs to fix the foundations, because the present value of the terminal is unaffected by whether the foundations are fixed or not.

Question 8(1 point)