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b. Excess Land; Insurance Proceeds; KFTY Receivable
The parties agree, and we find, that the excess land
constitutes a nonoperating asset to be added to the present value
of Korbel’s cashflows at a value of $2,198,000 and that insurance
proceeds in the amount of $1,110,000 likewise are to be so added.
Although they differ in exactly how a receivable from KFTY in the
amount of $2,209,000 is to be taken into account, they agree that
it is to be taken into account. We agree and so find. The total
of the aforesaid nonoperating assets is $5,517,000
c. Excess Cash
Dr. Spiro considered $5,250,000 of cash held by Korbel on
December 31, 1994, to be a nonoperating asset, which he referred
to as “excess cash”. Dr. Spiro reached that conclusion by
examining historical cash levels in relation to gross revenue, in
order to determine the appropriate “normalized” cash level, which
he determined to be 6.55 percent of gross revenue. Applying that
percentage to 1994 gross revenue, Dr. Spiro concluded that Korbel
had excess cash in the amount stated. In determining the value
of the shares, he included only a portion of the excess cash to
reflect the inability of minority shareholders to force a
distribution of such cash. Dr. Bajaj concluded that there was no
excess cash, and, in his rebuttal testimony, he persuasively
explained his basis for that conclusion. We were impressed with
his interpretation of the historical data, in light of the
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