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been less accurate than the report available at the time of the
transaction, in part because they were made shortly after the
computers were first introduced by IBM. Increasing the residual
values forecast in the DMC Residual Value Report available at the
time of the transaction by the undervaluation percentages provided
by petitioners’ expert Mr. Callahan for each model, a reasonable
estimate of the residual value of the equipment would have been as
follows:
Computation of Residual Value
Full Term
Type/Model/ List Price
Category (LP) DMC/(Increase) Amount
9021/720/E $35,412,247 1.2% (2.6) 3.12% $1,104,862
9021/740/F 12,336,045 2.4 (1.5) 3.60 444,098
9021/820/G 68,624,690 2.2 (1.5) 3.30 2,264,615
9021/860/H 40,808,478 2.3 (1.5) 3.45 1,407,892
9021/900/I 139,926,914 2.2 (1.5) 3.30 4,617,588
9121/260/A 4,637,115 1.6 (1.1) 1.76 81,613
9121/320/B 18,186,545 1.6 (1.1) 1.76 320,083
9121/440/C 6,923,363 1.6 (1.1) 1.76 121,851
9121/480/D 14,427,399 1.6 (1.1) 1.76 253,922
Total 10,616,524
Early Termination Date
9021/720/E $35,412,247 2.0% (2.6) 5.20% $1,841,437
9021/740/F 12,336,045 6.1 (1.5) 9.15 1,128,748
9021/820/G 68,624,690 5.5 (1.5) 8.25 5,661,537
9021/860/H 40,808,478 5.5 (1.5) 8.25 3,366,699
9021/900/I 139,926,914 5.4 (1.5) 8.10 11,334,080
9121/260/A 4,637,115 5.2 (1.1) 5.72 265,243
9121/320/B 18,186,545 4.7 (1.1) 5.17 940,244
9121/440/C 6,923,363 4.5 (1.1) 4.95 342,706
9121/480/D 14,427,399 4.7 (1.1) 5.17 745,897
Total 25,626,591
We find that at the time of the transaction, the estimated
residual value of the equipment for the final termination dates was
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