Statistical decision theory is concerned with making decisions under uncertainty. One shall define uncertainty as being a situation where the underlying probability model is not known. Tossing a fair coin fairly is an example of a probability model which is known. There is 0.5 probability of a head and a 0.5 probability of a tail. However, if a person took a coin out of his pocket and threw it in the air, the coin might not be perfectly fair, or with enough practice his pitching arm could be taught tricks. With either event, the underlying probability model is not known and the process of placing a bet on the toss of a coin is the type of problem to which one may apply statistical decision theory. The schools offering the Ph.D. have responsibility to see that their graduates are better equipped than the present generation to solve the complex problems of the business community. One of the tools available, and which will be widely used in the future, is the tool of quantitative analysis, including the very important tool of statistical decision theory. Teachers of prospective practitioners of the art of business administration have to instill an appreciation of quantitative skills so that the businessmen of the future are receptive to the ideas that will be generated in industry and in the academic community.

It is generally agreed that depreciation accounting attempts to allocate the cost of an asset to expense so that each year of the asset's useful life bears a reasonable portion of the expense of using the asset. It is the argument of this article that the choice of the method of cost allocation should not be left to whim or chance, but rather should be the result of a logical theory of depreciation. To implement the theory of depreciation, it's necessary to view the purchase of a long-lived asset as the acquisition of a series of revenue producing services rather than the purchase of a physical unit. It can be assumed that two of the most important measures of performance used by investors, management, social scientists, and others are the income figure, and the return on investment. Conventional depreciation accounting procedures generally make both of these computational subject to severe criticisms. The depreciation charge is based on the expectations at the time of purchase. If after acquisition management changes the method of operation, or economic conditions are not as forecasted, the depreciation schedule is not changed. However, the reported income and return on investment will differ from the planned figures, thus they will indicate when there is a need for investigation.