Small changes, big impact – The growth rate is an important part of lost profits estimates

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Abstract: One of the more challenging aspects of calculating lost profits is determining the appropriate growth rate to apply during the damages period. This article explains how growth fits into the before-and-after method, as well as factors that experts use to support reliable growth rate assumptions. A sidebar illustrates how small changes to the growth rate and other variables can have a big effect on an expert’s opinion. R.F.M.A.S., Inc. v. So, 748 F. Supp. 2d 244, S.D.N.Y., 2010 Manpower Inc. v. Insurance Company of the State of Pennsylvania, No. 08C0085, E.D. Wis., September 20, 2010 Knox v. Taylor, 992 S.W.2d 40, Tex. App., 1999