3-18 Although Ken Brown (discussed in Problem 3-17) is the principal owner of Brown Oil, bis 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 dif- ferent decision. What decision criterion should Bob use, and what alternative will be select? 3-17 Kenneth Brown is the principal owner of Brown Oil Inc. After quitting his university teaching job, Ken has been able to increase his annual salary by a fac- tor of over 100. At the present time, Ken is forced to consider purchasing some more equipment for Brown Oll because of competition. His alternatives are shown in the following table: FAVORABLE UNFAVORABLE MARKET MARKET EQUIPMENT ($) Sub 100 300,000 -200,000 Oiler 250.000 - 100,000 Texan 75,000 -18,000 For example, if Ken purchases a Sub 100 and if there is a favorable market, he will realize a profit of $300,000. On the other hand, if the market is unfa. vorable, Ken will suffer a loss of $200,000. But Ken has always been a very optimistic decision maker. (a) What type of decision is Ken facing? (b) What decision criterion should he use? Complete Maxi Max Maxi - Min Row Row MAX Faw. MIN Equip Unfau Sub 100 300,000 - 200,000 280,000 -100,000 Texan 75.000 - 18.000 Olers Maxi-Max Marimin Choose: Choose