3. Twenty years ago, Bowie & Howard Corporation purchased an industrial warehouse in Baltimore for $800,000 and insured the building under a $680,000 fire insurance policy containing an 80% coinsurance clause. Several years later, the purchased warehouse, having a fair market value of $1,200,000, sustained a fire damage of $700,000.

What is the amount recoverable from the insurance company?

1. $495,833
2. $485,833
3. $475,833
4. $455,633
5. None of the above

4. Chicago Technologies, Inc., (CTI) office buildings in Virginia were destroyed by fire. CTI and the insurance company disagreed on the amount to recover for the damages. As a result, you have been engaged as a forensic accountant to compute the amount recoverable for the damages before trial as an Exhibit to be presented in a court of law.

The lawyers provided you with the following accurate and valid information.

Earnings before trial, had the harmful event not occurred was $2,500,600

Actual earnings before trial was $1,670,000

Prejudgment interest was $740,000

Calculate the damages before trial (Hint: Use the Standard Formula for Damages calculations prescribed by the Federal Judicial Centers Reference Manual on Scientific Evidence)

1. $4,910,600
2. $3,431,200
3. $1,570,600
4. $3,430,000
5. None of the above

5. West Coast Baseball Association, Inc.s, (WCBA) baseball stadium was destroyed by a tornado. WCBA and its insurance company disagreed on the amount to recover for the damages. As a result, you have been engaged as a forensic accountant to compute the amount recoverable for the damages after trial as an Exhibit to be presented in a court of law.

However, based on negotiations, the litigants (WCBA and the insurance company) have agreed on the following cost elements:

Projected earnings after trial, had the harmful event not occurred was $4,300,500 million

Project earnings after trial was $500,000

Discounting was $450,000

Required: Calculate the damages after trial? (Hint: Use the Standard Formula for Damages calculations prescribed by the Federal Judicial Centers Reference Manual on Scientific Evidence)

1. $5,250,000
2. $4,250,500
3. $3,350,500
4. None of the above