- 22 -
in this case. Another assumption is that any client who
moves out of Oklahoma County will seek another accountant.
That assumption ignores the fact that the Oklahoma City
metropolitan area spans several counties and that a number
of other counties are in relatively close proximity to
Oklahoma County. Contrary to Dr. Alexander's assumption,
it is not apparent that a client who moves to a nearby
county or even to another State will necessarily change
accountants.
Retirement: Dr. Alexander also considered the effect
of retirement on the useful life of the subject client
list. He analyzed data provided by petitioner showing the
fees paid by, and the age of, each client. He noted "a
dramatic drop-off in fee income per client beginning at age
70." Dr. Alexander concluded that this decrease is due to
"the client's having moved into the retirement phase * * *
and thereby requiring less fee-based accounting services."
His report states as follows: "Based on our calculations,
we estimate * * * a loss of approximately 7.5 percent in
fee income per year due to retirement." Dr. Alexander did
not include his calculations in his report.
We agree with Dr. Alexander that his chart of the
average fee versus age distribution of clients on the
subject list suggests that the fees paid by clients who
are older than 70 years of age are substantially less than
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011