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arrangements personally, petitioner failed to show how his
involvement with ZSI’s finances imbued him with the ability to
set a dollar value on retained VARI without first considering any
financial records or evaluating ZSI’s customer base. If
petitioner did consider any information in making his projections
or if petitioner’s expert examined that information in
petitioner’s stead, they have not so asserted, nor have they
identified the information.
Respondent’s projections of gross and retained VARI are
reliable and probative of ZSI’s value, and petitioner has not
introduced evidence, other than his unsupported guess, to show
otherwise. We therefore accept respondent’s projections
regarding VARI.
II. Capital Expenditures
The second item we consider is ZSI’s projected capital
expenditures. Respondent projected ZSI would make capital
expenditures of $100,000, $125,000, $100,000, $100,000, and
$100,000 for the years 1993 through 1997, respectively, and that
those outlays would be sufficient to replace existing equipment
and to purchase new equipment as necessary. Petitioner contends
that respondent’s projections fail to account for expenses of the
presorting division and that respondent’s projections are
inconsistent with ZSI’s history of expenses, projected level of
growth, and projected depreciation. Petitioner instead projected
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