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Commissioner, 86 T.C. 547, 562 (1986); see also Pabst Brewing Co.
v. Commissioner, T.C. Memo. 1996-506.
We are not persuaded by either expert. Petitioner's expert
was Edwin S. Mruk, senior partner and owner of Mruk & Partners.
He candidly stated that the companies he had used for comparison
were "reasonably comparable, not totally comparable." He chose
these companies not because they were appropriate, but because
they were cited in an engineering report respondent used in
making his determination in this matter. Respondent's
engineering report was not offered in evidence. Mr. Mruk also
did not make an independent evaluation, preparing a rebuttal for
a document that is not part of the record.
Respondent's expert was James Carey, owner of a management
consulting firm, Carey Associates, Inc. His conclusions were not
based on data from businesses that are akin to the business at
hand; i.e., medium-sized wholesalers of electronic components.
Some of the firms in his survey are, for example, software
designers, rather than hardware distributors. Others are large,
publicly traded corporations with sales far in excess of
petitioner's. We also question the reliability and validity of
Mr. Carey's sample size and data analysis. He received replies
from only 40 out of nearly 1,200 persons to whom he directed his
mailing, and he pointed to no methodological guidelines that
would indicate this small number was statistically reliable. In
fact, on many occasions, persons failed to answer questions, and
Mr. Carey interpreted these omissions as negative responses.
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