College
Case Study
Finance & Accounting
Pages 3 (753 words)
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One of the weaknesses of the jury’s lost profit assessment is that it failed to take into account the total revenues, expenses and profits from “Boxing Helen” with and without Kim Bassinger…

Introduction

It must be noted here that the operative word on the $3 million revenue is ‘potential’; hence the amount is the estimated revenue from making the film with Kim Bassinger thus it is relevant to the case. It is relevant because it is an estimate given that Ms. Bassinger had “committed to do the project” (Barton, Shenkir & Marinas 163). Considering that the $800,000 foreign pre-sales are only probable, which means in accounting term has a less than 50 per cent probability of happening, hence in determining whether the maximum and minimum lost profit estimates of Main Line be adjusted this amount is irrelevant. The appearance of Ms. Bassinger in the film will not make the possibility of having $800,000 in foreign pre-sales more than probable. The realized loss of $2.1 million from producing “Boxing Helena” without Ms. Bassinger is a relevant cost to the case. This amount is the difference between making the movie with Ms. Fern and with Ms. Bassinger. Hence, it should be included in the maximum and minimum lost profit estimates of Main Line. The given figures for this lost profit estimates should not be adjusted since they have taken into account the $2.1 million loss. ...
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It must be noted here that the operative word on the $3 million revenue is ‘potential’; hence the amount is the estimated revenue from making the film with Kim Bassinger thus it is relevant to the case. It is relevant because it is an estimate given that Ms. Bassinger had “committed to do the project” (Barton, Shenkir & Marinas 163). Considering that the $800,000 foreign pre-sales are only…