A claim by a chain of donut shops that they serve the best coffee in the world is not very credible
since it is very unlikely that they have evaluated even all coffee shops in their own community
let alone the country or the world. The claim would be more credible, for example, if they
reported that some independent organization had awarded them first prize in a contest, which had
received entries from many countries. To determine whether the chain had the world’s best
coffee would be very difficult, since “best” is a subjective matter with differing tastes across
countries and individuals. Conceivably one could sample the coffee served by the best-known
chains or look to the opinions of experts. Perhaps an internet website that invites everyone’s
opinion might provide helpful information. Most people would not consider the cost of obtaining
a high level of certainty about the claim to be worth the benefits of finding out.
Individual responses will vary considerably to this question. However, it’s necessary to clearly
establish the criteria applied for selecting a university and those criteria should be tailored to the
circumstances of the cousin. Then consideration can be given to what and how relevant
information should be gathered and then to how the universities will be ranked. Considerations
would include areas of interest (science, arts, business), career goals, academic performance,
resources to pay for university and accommodation away from home if appropriate, extra-
curricular and social interests, and any other personal interests. This question has no right
answer. What is crucial is the approach used to solve the problem and to recognize that a “one-
size fits all” approach is not appropriate.
Many different measurements might be suggested. The following list is not comprehensive:
•Class size indicates how much attention an individual student might receive from their
professors. This would be fairly easy to measure since number of students in a class is easy to
determine. However, within a university there can be wide ranges of class sizes and averages
could be misleading.
•Distance from home indicates whether accommodations will needed or whether
commuting is possible. This would be easy and objective to measure
•Cost of tuition indicates whether the student will be able to afford their education. Tuition
cost is easy and objective to determine but doesn’t give a complete measure of the cost of an
education. The cost of accommodation, books, transportation, and so on should also be
•Scholarships and financial aid available also indicate whether the student will be able to
afford their education. Information on these is readily available but can take some research to
ensure all sources of funds are considered. It may be difficult to determine whether a
particular student would receive the money associated with these sources.
•Employment levels and average salaries of alumni will indicate the student’s potential for
success after university. University programs often provide this information so in that sense
it’s readily available. Actual determination of the amounts can be difficult because it requires
self-reporting by graduates. Some/many graduates may not respond and there is no guarantee
that any information they provide is true.
Copyright © 2010 McGraw-Hill Ryerson Ltd.
John Friedlan, Financial Accounting: A Critical Approach, 3e