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user lessees.22 Although Svoboda has over 25 years of appraisal
experience, he had relatively little experience valuing residual
interests in equipment with useful lives of 10 years or less.
(a) Svoboda’s Opinions as to the Fair Market
Values and Estimated Residual Values
Svoboda concluded that, as of September 28, 1995, the K-Mart
and Shared equipment had the following fair market values and
estimated future residual values:
Estimated Future Residual Value On:
Equipment Fair Market Value 2-24-97 3-13-97 6-30-97 7-31-97 5-1-00 11-1-02
K-Mart
No. 32 $116,844 –- -- -- $50,076 -- $8,346
No. 33 473,452 –- -- -- 295,908 -- 29,591
No. 34 1,215,504 –- -- $759,690 -– -- 151,938
Shared
No. 5 567,521 –- $133,471 -- –- -0- --
No. 6 143,052 $30,654 -– -- –- -0- –-
Svoboda primarily used the sales comparison approach to
value the Shared computer equipment. His opinion was based on
published market data on this equipment, including reports
published by respondent’s expert, Daley. Svoboda concluded that
the Shared computer equipment would have no residual value by May
1, 2000, the date when petitioner’s over lease residual interest
in that equipment began.
22Svoboda also assumed that petitioner was contractually
entitled to income from the over lease residual interest periods,
a fact that is not supported by the operative documents.
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