Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 64

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          $750,000 downward adjustment yields a value for BCC of $6.75                
          million, as compared to Mr. Hitchner’s $7 million estimate.                 
               3.  Mr. Hitchner’s Estimate of Excess Cash                             
               Mr. Hitchner calculated that BCC had nonoperating assets of            
          approximately $2.3 million.  This figure included $433,572 for              
          notes receivable and an idle asphalt plant, plus approximately              
          $1.9 million of “excess cash”; i.e., that portion of BCC’s cash             
          on hand that Mr. Hitchner considered to be in excess of BCC’s               
          working capital needs.  To determine excess cash, Mr. Hitchner              
          compared BCC’s ratio of cash to assets as of the valuation date             
          with the industry average ratio of cash to assets for SIC code              
          1611 (Contractors--Highway & Street Construction).  Using the               
          industry average ratio for 1997 and BCC’s assets, he determined             
          that BCC required $1,125,029 of cash and cash equivalents.  Since           
          the cash and cash equivalents BCC had on hand as of the valuation           
          date ($2,994,970) exceeded this industry average by $1,869,941,             
          Mr. Hitchner concluded that BCC had excess cash, approximately              
          equal to the latter figure, which he treated as a nonoperating              
               We are persuaded that Mr. Hitchner’s reliance on industry              
          averages to measure BCC’s cash requirements produces an erroneous           
          estimate.  The uncontested testimony in this case establishes               
          that BCC required approximately $1.5 million in cash and cash               

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