ACC501 MOD3 CASE3-Relevant Information for Decision Making

ACC501 MOD3 CASE3-Relevant Information for Decision Making...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Relevant Information for Decision Making Basinger vs. Main Line ________________________ TUI University May 18, 2011 Relevant Information for Decision Making Basinger vs. Main Line Introduction In 1993, Main Line sued Kim Basinger for refusing to act in the “Boxing Helena” film. As a result of Basinger not playing the lead role, the producers claim monetary losses in excess of millions of dollars. Thus in this paper the subject to examine includes all parties’ sides relative to the plaintiff, Main Line, the defendant, Kim Basinger, and other expert testimonies to determine whether compensation demanded by Main Line was justified (Lycos Retriever, 2011). The first issue is whether damages claimed by Main Line should be revised downward. The lost profits should not be scaled down because of private negotiations for the cost of domestic distribution was lacking market efficiency and had not shown the eventual cost of the film had it been released. Essentially, the domestic distribution of $3 million is an approximation of future cash flow. Thus if Basinger had played the role in the film, the domestic revenues would have been much more than $3 million. Because Basinger was not the lead actress for “Boxing Helena,” the domestic box office grossed $2 million. However, if she had played the role in the film, the revenues would have been much higher than the $3 million. Also, distribution revenue should be reviewed, in this case, it should not be the main factor in analyzing Main Line's maximum and minimum profit lost (Main Line vs. Basinger,
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1996). Furthermore, the foreign pre-sales should be scaled down due to the fact that the $800,000 is also a reasonable estimation of future cash flows from foreign sales. The markets were well organized as relevant parties met in well-defined areas. Furthermore, foreign pre-sale information was excellent and showed in the film’s final sales of approximately $5 million. The loss of $2.1 million on the “Without Basinger” film should be adjusted to
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

ACC501 MOD3 CASE3-Relevant Information for Decision Making...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online