Peter S. Peracchio - Page 22

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               Domestic equities                  9.6%                                
               Foreign equities                   13.8%                               
                   3.  Determination of the Minority Interest Discount               
               The minority interest discount factors determined above                
          yield a weighted average discount of 6.02 percent, determined as            
          follows:                                                                    
                                                      Percent  Percent               
                                             Percent   Disc.     Weighted             
                     Asset Type             of NAV     Factor   Average              
               Cash & money market funds     44.0      2.0       0.88                 
               U.S. Government bond funds    0.4       6.9       0.03                 
               State and local bonds (MI)    2.1       3.5       0.07                 
               Natl. Muni bond funds         5.0       3.4       0.17                 
               Domestic equities             43.6      9.6       4.19                 
               Foreign equities              4.9       13.8         0.68              
               Discount                                          6.02                 
          Rounding to the nearest percentage point, we conclude that the              
          appropriate minority interest discount for the transferred                  
          interests is 6 percent.                                                     
               C.  Marketability Discount                                             
                    1.  Introduction                                                  
               The parties agree that, to reflect the lack of a ready                 
          market for the transferred interests, an additional discount                
          should be applied to the partnership’s NAV (after applying the              
          minority interest discount) for purposes of determining the fair            
          market value of those interests.  Such a discount is commonly               
          referred to as a “marketability discount”.  The parties disagree            
          on the appropriate magnitude of that discount in the context of             
          the transferred interests.                                                  





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