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other unitholders raised an issue with the seller of the
equipment, the appraiser, or any other person about the
failure of the Appraisal to provide the residual value
of the equipment at the expiration of the master leases.
We note other errors in the Appraisal. As stated
therein, the residual values of the equipment upon
expiration of the initial user leases are discounted "at
16%" in order to obtain the present values. In reviewing
those computations, we noted two inconsistencies. Our
computations are set forth below:
"Residual" Interest Present
Value Months Rate Value
Exh A $1,062,751 54 16.00% $519,763
Exh B 179,800 47 12.00 1112,638
Exh C 261,855 37 12.00 181,205
Exh D 188,502 31 16.75 122,657
1,692,908 936,263
1This amount is $125 more than the amount in the
appraisal, $112,763, which we were not able to duplicate.
From the above, the first inconsistency is that Mr. Wilkins
used three interest rates in discounting the "residual"
values at the expiration of the initial user leases, 16,
12, and 16.75 percent (referred to in the Appraisal as debt
interest rate or assumed debt rate), rather than the single
rate of 16 percent. The second inconsistency is that
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