CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 113

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          increased pressure on the lessees to replace computer equipment.            
          Additionally, by the mid-1990s computer equipment manufacturers             
          were inclined to offer significant financial incentives to                  
          potential customers.  Svoboda applied a 10-percent discount                 
          factor to account for those factors.  Svoboda’s fair market value           
          opinion concerning the over lease residual interests is                     
          summarized as follows:                                                      
                    Present Value of                                                  
          Anticipated Realization   Projected Future                                  
          Factor Percentage Range    Rental Income1                                   
          Equipment        Low         High         Low      High                     
          K-Mart     25 percent  50 percent    $116,292  $232,585                     
          Shared      1 percent   5 percent       6,036    30,182                     
                                                                                     
               Total and FMV2                     122,000   263,000                   
          1Determined by applying a discount factor of 10                             
          percent.                                                                    
          2Rounded to nearest $1,000.                                                 
                                                                                     
          ii.  Respondent’s Expert                                                    
               Daley concluded that, as of September 28, 1995, the K-Mart             
          photo processing and Shared computer equipment would:  (1) Have             
          an inconsequential estimated residual value at the beginning of             
          the residual lease periods, and (2) generate no future rental               
          income during those residual lease periods.  He also concluded              
          that the K-Mart and Shared equipment would have a total combined            
          estimated value of $499,406 at the end of the original leases.              









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