As long as they either don't open the envelope until just before the presentation, I'm pretty sure they fit within the rules of the competition.

Presumably they didn't line up the deal just before the presentation; presumably that was done in advance.

Look at it this way: if you can do things like that, you could just as easily form a "company" and spend the whole assignment period accumulating liquid but non-monetary assets in whatever manner you see fit. Then, at the last minute, open the envelope and buy the company from yourselves with the $5. Liquidate the company and pocket the value of the assets.

Would that be a valid solution to the assignment? If not, why would arranging a deal before starting the "timer" be any more valid? The agreement is still an asset, just a somewhat less liquid one.

What if it was counted because the teacher thought making the deal was where they made the money, not in the classroom. They made their money in the 2 hours, but delivered their service afterwards, which doesn't contradict her guideline.

So, the income can be counted before obligations are resolved? Tradesmen can "earn" large amounts of money in short periods of time under this definition, as they're often paid half up-front to fund materials, but they still need to do work in order to "earn" that money.

Well it depends on the method of accounting you're business would need or want to use, but in a monetary sense, then yes, it can be counted as cash made as soon as the money, not the product, is delivered.