Without Basinger Case Summary
Should Main Line’s maximum and minimum lost profit amounts be revised downward for the following? Why?
a. The domestic distribution revenues of $3 million because the deal had not been finalized.
Answer: No, the amounts should not be revised due to the fact that this amount was an estimate of future cash flows from domestic distribution. Just because the deal had not been finalized does not matter in this instance.
b. The $800,000 of foreign pre-sales because they were "probable" not actual.
Answer: same situation with question number 1. Again, the amount of $800,000 is an amount that is a reasonable estimate of cash flow from foreign sales.
c. The loss of $2.1 million on the "Without Basinger" film. …show more content…
Why would any producer produce a film in which they anticipate a loss? Would Main Line have made the movie if Sherilyn Fenn was the original actress to be casted for the lead role? So, it would not be proper to hold Kim Basinger liable for any loss incurred by Main Line for producing a movie that she did not even star in.
2. Are the following relevant to the determination of lost profits to Main Line? Why? a. Basinger's $3 million salary for "Final Analysis."
Answer: I don’t not feel it is relevant at all. This amount of salary was for her movie that had nothing to do with Main Line. If she was worth $3 million then was she able to get signed by Main Line for $1 million. b. The comparison of revenues for Basinger films with revenues for Fenn films Main Line vs. Basinger 3 Answer: Although it is easy to determine that the movies that Kim Basinger
a. The domestic distribution revenues of $3 million because the deal had not been finalized.
Answer: No, the amounts should not be revised due to the fact that this amount was an estimate of future cash flows from domestic distribution. Just because the deal had not been finalized does not matter in this instance.
b. The $800,000 of foreign pre-sales because they were "probable" not actual.
Answer: same situation with question number 1. Again, the amount of $800,000 is an amount that is a reasonable estimate of cash flow from foreign sales.
c. The loss of $2.1 million on the "Without Basinger" film. …show more content…
Why would any producer produce a film in which they anticipate a loss? Would Main Line have made the movie if Sherilyn Fenn was the original actress to be casted for the lead role? So, it would not be proper to hold Kim Basinger liable for any loss incurred by Main Line for producing a movie that she did not even star in.
2. Are the following relevant to the determination of lost profits to Main Line? Why? a. Basinger's $3 million salary for "Final Analysis."
Answer: I don’t not feel it is relevant at all. This amount of salary was for her movie that had nothing to do with Main Line. If she was worth $3 million then was she able to get signed by Main Line for $1 million. b. The comparison of revenues for Basinger films with revenues for Fenn films Main Line vs. Basinger 3 Answer: Although it is easy to determine that the movies that Kim Basinger