- 18 - economic risks. The turnkey risk is the risk inherent in promising a working facility. The developer’s profit represents the risk inherent in constructing a facility that cannot be sold for the price asked by the developer. Insofar as the turnkey fee and the developer's profit address different components of reproduction cost, we see no logical reason why they cannot coexist. We are persuaded that, in the instant case, the turnkey fee and the developer's profit figure represent different components of the reproduction cost of the bill of sale assets and that it was appropriate for Mr. Moody to include both of those figures in the reproduction cost of those assets. We now turn to Mr. Moody's computation of the developer’s profit. In calculating a developer's profit, Mr. Moody looked to conditions encountered by persons selling hydroelectric generating assets in the northeastern United States in December 1987. Mr. Moody determined that an appropriate range for a developer's profit was 20 to 25 percent; Mr. Moody applied a developer's profit of 20 percent. We do not believe that Mr. Moody overstated the developer's profit, and we accept his calculation of that profit figure. C. Richard K. Knoll Mr. Knoll’s written report is coauthored by Martin D. Hanan; neither Mr. Knoll nor Mr. Hanan is licensed as an appraiser. Mr. Knoll testified that his recent professional focus has been in the valuation of intangible assets and intellectual property.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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