Valuations and damage models

• Author: Jim Wren/Laura Brown
• Pages: 131-160

VALUATIONS AND

DAMAGE MODELS

6-1

CHAPTER 6

VALUATIONS AND

DAMAGE MODELS

I. OVERVIEW OF MODELS AND METHODS

§6:01 Difference Between Models and Methods

§6:02 Importance of Models and Valuation Methods

§6:03 Distinguishing Between Positive Values and Negative Costs

§6:04 The Value of Building Your Own Damage Model First

§6:05 Sample Models and Valuations

II. PERSONAL INJURY OR WRONGFUL DEATH DAMAGES

§6:10 Overview of Damages Components

§6:11 Steps for Computing Lost Earnings and Earning Capacit y

§6:12 Step 1: Future Earnings Projected From an Earnings Base

§6:13 Step 2: Work Life Expectancy

§6:14 Step 3: Actual (Mitigating) Earnings

§6:15 Step 4: Present Value of Future Net Earnings Loss

§6:16 Step 5: Personal Consumption Expenditures

III. BUSINESS DAMAGES

§6:20 Overview of the Valuation Methods

§6:21 Book Value (a Cost Approach)

§6:22 Multiple of Book and Multiple of Earnings (Hybrid Approaches)

§6:23 Capitalization Rate of Net Cash Flow (an Income Model)

§6:24 Discounted Cash Flow Analysis of Projected Future Earnings (an Income Model)

§6:25 Comparable Properties (a Market Value Model)

§6:26 Common Discounts and Premiums

IV. LOST PROFITS

§6:30 General Points

§6:31 The Discount Rate

§6:32 How Many Years to Project Lost Prof‌its

§6:33 Analyzing Lost Prof‌its at the Outset of the Case

V. VALUING REAL PROPERTY

§6:40 Appraisers Use Three Methods

§6:41 Income Approach

§6:42 Market Approach

§6:43 Cost Approach

VALUATIONS AND

DAMAGE MODELS

Proving Damages to the Jury 6-2

VI. ASSEMBLING THE BUSINESS LOSS DAMAGE MODEL

§6:50 General Points

§6:51 Type of Loss

§6:52 Method of Evaluation

VII. ADDITIONAL ECONOMIC LOSS ISSUES

§6:60 Tax Effects

§6:61 Loss of Insurability

§6:62 Loss of Credit