11. Company A had an exclusive contract to provide material to Company B for thr

Question

11. Company A had an exclusive contract to provide material to Company B for three years. Company A was to provide $750,000 of raw material each year. After one year, Company B canceled the contract. Company A sued Company B for breach of contract and won the case. Company A hired a forensic accountant to compute the damages. Company A’s profit margin was 35% and net income averaged 15% of sales. What was the amount of damages that Company A would claim?

$112,500
$225,000
$262,500
$1,500,000

20. Which item will not be part of a valuation report?

       Tort and defendant liability
       Breach of contract and proof of damages
       Defendant liability and breach of contract
       Defendant liability and proof of damages

12. What must a plaintiff prove in order to win damages?        Tort and defendant liability
       Breach of contract and proof of damages
       Defendant liability and breach of contract
       Defendant liability and proof of damages

Explanation / Answer

11. Company should claim $225,000 (2 years of net income impact)

12. Breach of contract and proof of damages

13. Yardstick method

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