Working through the financial adjustments: the lost profit calculation shows the report overstated the figure by 420,000, freight has 420,000 recoverable from the variable cost ledger, and I need to choose between the attrition or expected value amounts rather than including both. Fixed overhead of 480,000 follows Rule 1.

The fixed overhead is actually duplicative because the contribution margin approach already captures it — since only variable costs were deducted from lost revenue, the 40% contribution margin inherently includes recovery of fixed overhead. Adding it separately would double-count.

So past damages total 3,780,000 (lost profit plus freight), plus interest calculated at 6% simple over two years from April 2024 to April 2026, which comes to 453,600. Using the attrition method gives 5,733,600 total, while the expected value method yields 6,433,600. The report's figure of 9,640,488 overstates damages by either 3,906,888 or 3,206,888 depending on which method applies.

The report made an interest error by using compound interest (1.06² − 1 = 0.1236) instead of simple interest, inflating the interest component by 606,888. Breaking down the overstatement: lost profit overstated by 420,000, freight duplicated at 200,000, expected value entirely excluded at 2,200,000, fixed overhead added twice at 480,000, and interest miscalculated by 606,888 — these reconcile perfectly to the total overstatement. I should also flag the unsupported inputs like the 60% ratio and attrition assumptions without replacing them, then outline the litigation sequence and workpapers needed to support each calculation.

On the substantive defense: the expected value method is larger but depends on the valuation model, while the attrition method ties more directly to the facts — I'd recommend the plaintiff elect between them, exclude the EV method absent the model, and cap attrition at 1,500,000. There's also an apparent 45% margin discrepancy (3,780,000 ÷ 8,400,000) that either reflects an arithmetic error or a margin different from the stated 40%, which I should flag per the rules.