Page 9 - Calculating Lost Profits

Figure 7.5. Selected Regression Output: Exec. Comp. Expense Regressed Against Revenue and CFO
Presence ........................................................................................................................................................ 49

Company-Specific Factual Investigation .......................................................................................................... 50

Figure 7.6. Total Parent-Level Expenses Compared to Total Food and Beverage Revenue ........................ 50

Figure 7.7. Legal Expenses, Stores Open at Year-End, and New Stores by Year ........................................ 51

Figure 7.8. Possible Categorization of Costs ................................................................................................ 52

Chapter 8 — Prejudgment Interest ................................................................................................................... 53

Overview ........................................................................................................................................................... 53

Prejudgment Interest and Lost Profits Calculations Under Federal and State Law .......................................... 54

Sample Calculations of Prejudgment Interest ................................................................................................... 55

Figure 8.1. Prejudgment Interest Using Simple Interest ............................................................................... 55

Figure 8.2. Prejudgment Interest Using Annual Compounding ................................................................... 56

Prejudgment Interest Period .............................................................................................................................. 56

Prejudgment Interest Rates in Federal and State Courts ................................................................................... 57

Considerations in Selecting a Prejudgment Interest Rate ................................................................................. 58

Risk-Free Rate .............................................................................................................................................. 58

Defendant’s Cost of Unsecured Borrowing .................................................................................................. 59

Plaintiff’s Cost of Borrowing or Return on Investment ................................................................................ 59

Plaintiff’s Cost of Capital or Cost of Equity ................................................................................................. 59

The Prime Rate and Other Rates ................................................................................................................... 59

The Role of the Practitioner .............................................................................................................................. 59

Post-Judgment Interest ...................................................................................................................................... 60

Ex Ante and Ex Post Calculations .................................................................................................................... 60

Figure 8.3. Ex Ante Discounting and Prejudgment Interest ......................................................................... 61

Chapter 9 — Discount Rates .............................................................................................................................. 62

Overview ........................................................................................................................................................... 62

Chapter 10 — Taxes ........................................................................................................................................... 64

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