Red Baron Case

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The Red-Bearded Baron Once upon a time many, many years ago, a feudal landlord lived in a small province of Central Europe. The landlord, called the Red Bearded Baron, lived in a castle high on a hill. This benevolent fellow took responsibility for the well-being of many peasants who occupied the lands surrounding his castle. Each spring, as the snow began to melt, the Baron would decide how to provide for all his serf dependents during the coming year. One spring, the Baron was thinking about the wheat crop of the coming growing season. “I believe that 30 acres of my land, being worth five bushels of wheat per acre, will produce enough wheat for next winter,” he mused, “but who should do the farming? I believe I’ll give Ivan the…show more content…
We cannot simply compare the amounts of net income for Ivan and Igor because the Red Bearded Baron entrusted them with different amounts of resources. We must relate the net income amounts to some base. Several possibilities include: IVAN IGOR Net Income/Average Total Assets……..
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