I have 2 questions only. You can see them after the key details.

• Comfort Now LA (CNL) was a small business that manufactured bleacher seat pads.
• CNL had a policy of providing an annual cost of living increase for its assembly workers to maintain a constant annual cost of $25,000 per worker (1984 dollars).
• As of January 2005, up to ten of the assembly workers were provided by a local Sheltered Workshop facility (a facility that provided disabled workers)
• Nationwide Horizon Enterprises, a local manufacturing conglomerate, provided the remaining workers and production space when more than ten disabled workers were required. Nationwide Horizon was also paid $25,000 (inflation-adjusted) apiece for its workers.
• Through December 2005, sales were generated primarily by manufacturers representatives who received a standard 5% of sales as their commission.
• In 2005, Nationwide Horizon Enterprises purchased CNL.
• They were adding the CNL products to their own manufacturers lines.
• Managers soon found that while sales were growing, profits were shrinking.
• The management responded for the second half of 2005 by increasing the commission to their manufacturers representatives from 5% to 6%.
• The salesforce responded quickly, and sales boomed.
• Even though sales were up, the deal was not proving to be profitable.
• The board of directors was informed that Nationwide Horizons management team had decided to reduce CNLs production staff by letting go of those disabled employees.
• Now in 2007 Nationwide Horizon has been sued by civil rights attorney claiming that closing down the Sheltered Work Facility manufacturing operation was a wrongful termination.
• Her court filings say that there was no valid business reason for selecting the disabled workers for layoff, there was no economic justification for dismissing these workers who had been at least as productive, and profitable, as their non-disabled counterparts for so many years.
• The attorney claimed that this was obvious discrimination against the disabled and because of the discrimination, her ten clients will be unemployed for an average of 20 years each.
• The attorney is asking the court for a verdict of $20,000,000 as an appropriate award to her ten clients if she prevails in her action.

She estimated this figure by computing 20 years x 10 clients x $25,000 = $5,000,000, doubling it to account for her fees, then doubling that to account for future inflation.

a. Assume that with reasonable efforts to mitigate, the terminated employees could find comparable work within one year of termination. What is a reasonable estimate of the employees economic losses due to the termination? (The value should be expressed as a present value, reflecting the time value of future payments.)

b. Assume that the jury believes the plaintiffs claim that the workers will be unemployed for an average of twenty years each. What is a reasonable estimate of the employees economic losses due to the termination? (The value should be expressed as a present value, reflecting the time value of future payments.)