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4. STATEMENT OF UNDERSTANDING & WORI{ PLAN <br />A. Scope of Work Statement <br />DM&A's appraisal specialty, business goodwill valuation, is a vital component of any acquisition project. The firm <br />can assist the City with the following key services. <br />Budgetary Estimates of Goodwill Loss <br />DM&A can assist in the planning phase of a project by preparing budgetary goodwill loss estimates. These <br />estimates are based upon limited site inspections of the subject businesses, access to any publicly available data, <br />limited transactional research, and our extensive experience in valuing comparable businesses and in negotiated <br />settlements and jury awards in eminent domain proceedings. This analysis does not include management <br />interviews, review and analysis of historical and prospective financial records, nor in depth industry and market <br />research. Accordingly, the conclusions are highly preliminary and inappropriate for settlement negotiations. The <br />preliminary estimates are solely suitable for budgetary purposes. Budgetary estimates can generally be completed <br />within 20 to 30 days. <br />Goodwill Loss Acquisition Appraisals <br />DM&A's acquisition appraisals are based upon data which may be provided by the business' ownership at its <br />discretion. Such information may include leases, background on the business provided via owner/management <br />interviews, historical and prospective financial data, and information about proposed relocation sites. In addition, <br />DM&A will perform basic transactional research in light of our understanding of the business' operations and <br />financial condition. DM&A will also coordinate with real estate and fixtures and equipment appraisers to avoid <br />duplication of compensation. Further, DM&A's analyses will be guided by relevant statutory and case law <br />pertaining to compensation for loss of goodwill. <br />The result of each acquisition appraisal study is presented in a brief report with attached schedules. Included within <br />this document are the purpose of the assignment, the sources of information utilized, a brief description of the <br />13 <br />