Reference no: EM131608544

The air conditioning unit of the Home State Insurance Company's new office wing is not functioning. The compressor and the fan are out because the system was improperly wired. After much discussion, the general contractor has agreed to replace the whole system. The agreement specifies penalty costs of $300 for every day over 15 that the replacement requires. In addition, the contractor estimates that it will cost $50 in indirect project costs each day just to administer the project. (In other words, there is a $50 savings for each day the project is reduced, and a $300 penalty for each day over 15.)