:37:03
New paragraph.
:37:09
So, new paragraph.
:37:11
While choosing between a fixed
license fee per machine per year...
:37:16
or one based on production volume
with a guaranteed minimum fee...
:37:20
we agreed on the first alternative.
:37:24
They obviously think
we'd audit their books...
:37:27
and find out their actual
production figures...
:37:31
No, write
when auditing their books...
:37:34
we'd obtain certain information...
:37:37
which we would use when setting up
offices in the countries in question.
:37:45
The problem is that a completely
new point was then raised.
:37:49
l protested by saying that that point
had been raised much too late.
:37:53
But in fact, they're right. lt'll
be difficult to dismiss their demand.
:37:59
New paragraph. They said that, as
they had decided on Alternative 1 ...
:38:05
the license fee would pay
off the equipment in 7 years.
:38:10
The first extension of the agreement
covers a period of 7 1/2 years...
:38:15
a further prolongation
would extend it to 10 years.
:38:19
As the equipment,
which remains our property...
:38:23
is amortized at the end
of the first prolongation period...
:38:27
they are of the opinion the license
fee should be reduced after 7 years.
:38:33
New paragraph. They are
of course right in the long run.
:38:36
Which means that we have to tell them
how much the equipment costs.
:38:42
ln our calculations of the two
alternatives, we assumed correctly...
:38:47
they would choose Alternative 1 .
So we overstated the costs.
:38:54
Which means that...
:38:56
if we are to deduct those costs from
the license fees after 7 years...