1.a.Dated 01.01.1980
MEMORANDUM FOR: Brunswick Boat
FROM : CD Boat
SUBJECT : Loss caused due to unethical practice and negligence.
As from the 1st January 1980 CD boat started acting as the dealer for the company Brunswick Boat. It was decided that CD boat will sell the product, which is boat for Brunswick. It was decided by the company at the beginning of the business that there will be no discrimination of any kind from the company and each and every dealer will be consider the same. It was decided that the company will provide regular supply of products so that CD boat can continue regular running of the business. The profit that is made by the dealer is not to be shared by them with Brunswick. The dealer will not be charged of any other charges whatsoever other than the cost regarding product (Bradley Jr and Mims, 2017).
With the commencement of the business it so happened that the demand of the boat were high and production in regard to that was pretty low. There was a problem as the company could not supply ample amount of product to the company as demanded. This was a great problem for all dealers which the executive took advantage off. As Brunswick boat was short in supply due to their high demand it created a situation which the executive of the company took advantage off. The dealers bribed the executive in order to get more boats allotted to them. In this situation the dirty dealer and the executive made a pact between themselves and the dealers who were clean suffered. The dealer had to face great loss due to the situation that was created by the dirty dealers and the executives. If such a situation would have arisen in that case the company CD boat would not have faced loss.
The executive started practicing unethical things which came to an existence due to the lack of supply from the side of the company. Further they made for losses on used boats. They traded on used boats on mainly exchanged with new boats as the supply of new boats were very minimum or less so the trading of the used boats also reduced. This was another big problem for the company where they lost business (Colburn et al, 2015).
b.The regression lines taken for new boats sales as per the sales new and used boats sales on sales used can further explain the lost profit for the new boats sales. The regression lines for new boat sales is
As per the equation, here R square is 0.996 and t statistics as 50.88. This can be further explained that new sales are increased by 10 cents if there is change in per dollar sales of the new sales. The results can be further turned into lost if the new sales are not incrementing as per the new boat sales. This result is a best fit as R square is 99.6%, which explains the variations in the model (Curran, 2015.).
On the contrary, the regression lines for used boat sales is
As per the equation, here R square is 0.990 and t statistics as 32.73, which is statistically valid for the data. This can be further explained that new used sales are increased by 4 cents if there is change in per dollar sales of the used boats. The results can be further turned into lost if the used sales are not generating the 0.04 cents per boat as per the used boat sales. This result is a best fit as R square is 99%, which explains the variations in the model (Clay, Kitts and da Silva, 2014).
c.As CD boat did not support these unethical practices and did not offer any kind of bribe to the executive, they had to suffer further delay regarding the supply of the boats. The other dealers who offered bribe to the executive received continuous supply of products. The business of the CD boats suffered extensively due to this unethical practice and there was break of promise from the side of the company. CD boat lost sale and also there customers due to this negative practice by the executive of the company which the company is directly or indirectly is responsible off (Evans and Weil, 2017).
d.In order to sum total the average lost profits into a single figure we need to do the average of the entire figure and derive the figure as on December 31, 1992.
2.First, step of the methodology is to determine the scenario .After that we need to calculate the damages. Calculate the damages arising from such infringement which requires a assessment, this is called the counterfactual scenario. This is often called the central stage in the calculation of any damages estimation. Developing an accurate counterfactual requires a detailed review of the following questions (King, McGregor and Whittet, 2016).
Secondly, the methodology is to move from the factual to the final value. In this stage the difference between the factual data and the final data is finally converted to the final value. For example, if the counterfactual analysis has estimated the average annual overcharge of a cartel, and the cartel infringement lasted five years, the estimate needs to be aggregated over those five years.
Lastly the step is to calculate the final value of the damages, which requires the results from the counterfactual analysis to be input into a financial valuation model. This will require two elements firstly to sum up the losses from different types that is Quantifying antitrust damages which is claimed and summing up the losses from CD boats, including the application of interest (Lloyd, 2014).
1.Apart from the sales of the boats the company also used to make profits from the spares and services of the boats. This was another area where the company made profits servicing and selling spare parts for the boats. As there was no supply of new boats naturally the servicing and sales of spares also got further reduced (McCutcheon, 2016).The company had made a huge opportunity loss where they could have sold much higher units of the products were supplied with much lesser number of the products and this caused great loss for the company. There were some fixed cost that the company had to bear and due the reduction in business the company faced huge losses.
The loss that is faced by CD boat was caused by Brunswick and the company is directly or indirectly related to this loss. The losses were further increase by the executive of the company who allotted the products to only that dealer who offered them bribe. As CD boat refused to carry any such practice they suffered further as they were ignored by the executive of the company. These losses are to be bewared by the company (McIntosh, 2014.).
The losses are the loss in opportunity that is the total business that could have been carried out by the company and the total revenue that the company had the ability to earn and actually earned. This difference amount is the actual loss that is suffered by the company (Arnold and Jacoby ,2015).
References
Bradley Jr, C.W. and Mims, M.C., 2017. Defending Against The Lost Chance Claim Lurking Within Plaintiff’s Petition; Lagniappe: How To Avoid Being Taxed With $155,000 of Plaintiff’s Costs.
Colburn, L.L., Clay, P.M., Seara, T., Weng, C. and Silva, A., 2015. Social and economic impacts of hurricane/post tropical cyclone sandy on the commercial and recreational fishing industries: New York and New Jersey one year later. US Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service.
Curran, M.L., 2015. The Wildlife Wildcard: Natural Resource Damages and Putting a Price on Nature. Natural Resources & Environment, 30(2), p.10.
Evans, E.A. and Weil, R.L., 2017. Ex Ante versus Ex Post Damages Calculations. Litigation Services Handbook: The Role of the Financial Expert, pp.1-5.
King, P.G., McGregor, A.R. and Whittet, J.D., 2016. Can California coastal managers plan for sea-level rise in a cost-effective way?. Journal of Environmental Planning and Management, 59(1), pp.98-119.
Lloyd, R.M., 2014. Proving Damages for Lost Profits: The Before-and-After Method.
McCutcheon, J., 2016. Dead loss: Damages for posthumous breach of the moral right of integrity.
McIntosh, C., 2014. Claiming damages: company law. Without Prejudice, 14(1), pp.60-61.
Arnold, J. and Jacoby, A., 2015. Examining the Public Trust Doctrine’s Role in Conserving Natural Resources on Louisiana’s Public Lands. Tul. Envtl. LJ, 29, p.149.
Clay, P.M., Kitts, A. and da Silva, P.P., 2014. Measuring the social and economic performance of catch share programs: Definition of metrics and application to the US Northeast Region groundfish fishery. Marine Policy, 44, pp.27-36.
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