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emphasized by the fact that he spent 10 to 20 percent of his time
working for Hickory.
We can accept the general methodology of an expert and
reject the expert's ultimate conclusion if the record does not
support the conclusion. Rutter v. Commissioner, 853 F.2d 1267,
1274 (5th Cir. 1988), affg. T.C. Memo. 1986-407; Barry v. United
States, 501 F.2d 578, 581-583 (6th Cir. 1974). In addition, we
can decline to follow the opinion of an expert witness if the
opinion is contrary to our own judgment. Barry v. United States,
supra at 583.
Respondent relied on an expert in the field of compensation
and business valuation. In his opinion of the reasonable
compensation for services rendered by Mr. Heitz to Exacto, he
relied on representative data and an investor return analysis
approach. Respondent's expert placed more emphasis on the
investor return analysis tailored to the financial statements of
Exacto. An investor return analysis compares a company's after-
tax profit to its equity to determine whether an independent
investor would be satisfied with the level of return.
Respondent's expert indicated that the minimum required return
for an investor in Exacto, given the risks associated with the
industry, would be about 13 percent. Respondent's expert
concluded that Exacto's after-tax profit was insufficient to
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