Question

Although Ken Brown (discussed in Problem 3-17) is the principal owner of Brown Oil, his brother Bob is credited with making the company a financial suc- cess. Bob is vice president of finance. Bob attributes his success to his pessimistic attitude about business and the oil industry. Given the information from Problem 3-17, it is likely that Bob will arrive at a different decision. What decision criterion should Bob use, and what alternative will he select

Answer 1

FAVORABLE UNFAVORABLE

MARKET MARKET

EQUIPMENT ($) ($)___

Sub 100 300,000 – 200,000

Oiler J 250,000 – 100,000

Texan 75,000 – 18,000