- 11 -
virgin resin would remain at then-current prices per pound or
that the recycled pellets would be as marketable as virgin resin
pellets; and (9) certain potential conflicts of interest existed.
The POM also stated on its first page that “THIS OFFERING
INVOLVES A HIGH DEGREE OF RISK” and repeatedly urged potential
investors to seek independent advice and counsel before investing
in Madison.
The POM stated that the projected tax benefits for the
initial year of investment for an investor contributing $50,000
would include investment and energy tax credits in the aggregate
amount of $77,000, plus tax deductions in the amount of $38,610.
The POM also stated that, assuming each recycler processed an
average of 1,872,000 pounds of polystyrene scrap per year and
the market price of virgin pellets increased approximately 11
percent annually over the term of the venture, the net projected
profits to the partnership through 1992 would equal $2,873,144.13
13The POM projected net profits over the life of the venture
as follows:
1982 -0-
1983 $40,365
1984 185,679
1985 213,531
1986 245,560
1987 282,394
1988 324,754
1989 373,467
1990 429,487
1991 493,909
1992 283,998
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