Estate of James J. Renier, Deceased, Kent L. Renier and Dubuque Bank & Trust Company, Co-Executors - Page 20

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          excess working capital on that date.  To account for the interest           
          generated by this excess working capital, Mr. Kramer took the               
          excess working capital amount on the valuation date, multiplied             
          it by 5 percent,15 divided the result by 12 (to get a monthly               
          figure) and then multiplied that amount by 69.33 months.  The               
          result was then subtracted from reported net income as a                    
          normalizing adjustment.  Using this formula, Renier’s excess                
          working capital generated $104,584 in interest over the base                
               As to which expert’s methodology best adjusts for excess               
          working capital, we believe that Mr. Sliwoski’s formula                     
          substantially underestimates Renier’s working capital needs.  For           
          example, for the year ended June 30, 1989, Mr. Sliwoski estimated           
          Renier would require working capital of just $24,417.  However,             
          Renier’s financial statement for that year indicates that it                

               15 See supra note 14.                                                  
               16 In his report, Mr. Kramer assumed Renier had only                   
          $225,000 in excess working capital, which would have generated              
          approximately $65,000 in interest over the base period.  Mr.                
          Kramer’s computation of excess working capital, however, does not           
          account for the double-counted liability of $137,038 conceded               
          during trial by both experts.  When this double counting is                 
          corrected, it results in a reduction in Renier’s liabilities of             
          $137,038 and a corresponding increase in total assets.  Because             
          Renier’s working capital requirements using Mr. Kramer’s formula            
          are unaffected by this correction, Mr. Kramer’s computation of              
          excess working capital would increase by $137,038 as a result,              
          from $225,000 to $362,038.  Therefore, under Mr. Kramer’s                   
          formula, the interest generated over the base period from the               
          increased figure for excess working capital is $104,584, rather             
          than $65,000.                                                               

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