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ZSI would make capital expenditures of $200,000 in years 1993
through 1995 and of $150,000 for each year thereafter. As
discussed below, petitioner’s arguments and projections do not
rest on credible evidence, and we are persuaded that respondent’s
projections are more reliable. We therefore accept respondent’s
projections regarding capital expenditures.
As near as we can tell, petitioner’s argument that
respondent failed to account for the “expenditures necessary for
the multi-line optical readers or any expenses related to the
bar-coding function of Zip Sort’s business”; i.e., the presorting
division, stems from a misunderstanding between respondent’s
expert and Mr. Rhoads. Mr. Rhoads told Mr. Cashion that $100,000
would be more than enough for expenses in 1993; Mr. Rhoads
intended that remark to relate only to the lettershop division,
but Mr. Cashion interpreted that remark as relating to the
lettershop division and the presorting division. Nevertheless,
because there is no evidence (1) that the presorting division
owned, or was likely to purchase for use in its business, any
capital asset of substantial value12 or (2) that expenses related
12In holding that petitioner’s argument fails, we note that
the MLOCR, the only asset we know to be used in the presorting
division, was leased rather than owned, and both parties
separately accounted for costs associated with equipment leases
in their projections. Without any evidence that the presorting
division included other assets, we can only assume that
respondent’s projections did, in fact, account for the presorting
division.
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