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information contained in his reports, Mr. Daley opined that the
purchase price of the computers was inflated and that the projected
residual values of the computers were unattainable.
Ms. Middleton, an expert in the field of residual valuation of
mainframe computers at IDC, rebutted the expert opinion of Mr.
Page. She opined that Mr. Page’s estimated economic life for the
equipment was too long and explained that IDC projected a 6- to 7-
year life for the equipment as of June/July 1993. On the basis of
the residual values forecast by IDC in its IBM June/July 1993
Residual Value Report, the residual value of the equipment on the
early termination date was less than $20 million, and on the
termination date it was less than $10 million. Ms. Middleton
testified that IDC did not take into account (in its residual value
forecasting) the value of computers on lease, or the “lease
premium”.
The experts made their evaluation of residual values on the
basis of a percentage of list price, as did the three September
1993 appraisals. The following table sets forth the percentages
used in the various appraisals as well as the percentages published
in DMC’s 1993 publication:
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