Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Mr. Snow has worked for the Jones Auto Parts Store for 12 years. He started as a sales clerk and worked his way up to

Mr. Snow has worked for the Jones Auto Parts Store for 12 years. He started as a sales clerk and worked his way up to assistant store manager. He was the assistant store manager for six years before he was fired by the owner after a heated argument. Mr. Snow started working at the store for $16,000 per year. Right before he was promoted to assistant manager, he was earning $21, 400. His first year salary as assistant store manager was $25,000, and he was earning $33,500 when he was fired. Mr. Snow was 45 years old at the times he was fired. In his damages claim, Mr. Snow is seeking $2,250,737 in lost compensation. In the expert report filed on Mr. Snow's behalf, the expert explained his calculation of damages as follows. Mr. Snow's salary grew at an average annual rate of 9.11 percent. This rate was calculated by dividing his final year salary of $33, 500 by his first year salary of $16,000. The result showed an increase od 109.375 percent (33,500 $16,000) = 2.09375. He then divided by 12 years to get an average annual increase of 9.11 percent (109.375 12)= 9.11 percent. Next, the expert projected a 9.11 percent salary increase conpounded annually for Mr. Snow for the remaining 20 years that he expected to be employed by Jones Auto Parts Store. He then summed the expected annual salaries to arrive at the alleged damages amount. You have been hired as an expert witness by Jones Auto Parts Store to provide rebuttal testimony to the expert hired by Mr. Snow. Without regard to the issue of liability in this case, critique the damages estimate of Mr. Snow's expect providing as much reasoning and support for your position as possible.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions