Reference no: EM132820269
Question
In answering both of these problems please perform thorough a calculation as you can based on the facts presented. In addition, and as part of your answer, please state any additional information you would like to see to make a more thorough calculation.
In performing the calculations relating to these problems assume a discount rate of 2% a year and use the probability of dying table on page 12-11 of the textbook. The employer's share of FICA tax is 7.65%
Problem One
You have been hired as an expert witness in a lawsuit filed by ABC Corporation based on the wrongful termination of a contract. ABC Corporation entered into a contract with DEF Corporation to supply raw material for one of DEF Corporation's manufacturing processes. The contract was for a two year period and began on January 1, 2017. On July 1, 2017, DEF Corporation sent notice to ABC Corporation that they were terminating the contract immediately because they had found another supplier who could fulfill their raw material needs at a lower cost. ABC Corporation's sales price to DEF Corporation for the raw material was $100,000 per ton of the material. They projected supplying 3 million tons of the raw material annually to DEF Corporation. Their fixed overhead was $500,000 and their variable overhead was $20,000 per ton. Perform calculation of what your total damage figure would be based on this information and specify any additional information you would like to know to perform a more detailed calculation.
Problem Two
Ms. S., age 58, was terminated from her employment as a controller at XYZ Corporation and replaced by the owner's daughter who needed a job. Ms. S. had worked in the controller position for ten years and earned $100,000 annually at the time of her termination of employment. Her wages had increased 1.5% each year for the past ten years. She was employed by other employers prior to beginning her employment at XYZ Corporation ten years ago. Ms. S. has retained you to provide an expert report on her behalf in a lawsuit she has filed for wrongful termination. Perform calculation of what you believe her total damage figure should be in that lawsuit. In addition, specify any additional information you feel you would need to make a more detailed calculation.
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