Trinity Church v. John Hancock. Market value vs. replacement costs in tort cases Court said replacement (repair) cost measure of damages is appropriate even though it’s quite high – this is “special purpose” property with no discernible market value
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Assume that Linduh was reasonably severely injured by Buzz in an auto accident. Linduh has had several operations for which Buzz’s insurance has agreed to compensate her. But Linduh’s doctors tell her she will need another operation in 7 years to finally repair the damage. It is estimated that the cost of this operation will be $100,000 in seven years.
The insurance company has agreed to give Linduh the present value of that future $100,000 operation. Use the present value table on p. 1010-11 and assume Linduh invests the money she is awarded so that she receives a 3% return. How much money will Buzz’s insurance company have to give Linduh now in order for her to have $100,000 in 7 years (or what is the present value of $100,000 using these assumptions)?