The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Income

Collection:: Economics Books

Sec. 4] INCOME ACCOUNTS 127 § 4 Such irregularity of income may be avoided, not only by a depreciation fund, but by other devices, for instance, by paying for the house in installments, by borrowing money to defray cost and mortgaging the house, or by sell- ing other property. Another method of steadying income and one which ought to set at rest any remaining qualms which the reader may feel at the procedure, which has been adopted, of entering cost of new construction under “outgo” — applies when the same owner possesses so many of the articles in question that the reconstruction of one or another of them must occur at short intervals. Consider, for in- stance, the case of a building and loan association which has fifty houses, each built in a different year and each of which lasts fifty years, so that the houses have to be rebuilt at the rate of one every year. In the accounts of such an association the expense side should include the cost of new construction as a regular annual item, thus: — BuiLpinG AND LOAN ASSOCIATION Fifty houses (with land) 1900 Income Outgo Rents of 49 houses at Construction of one new $1000 a year . . . $49,000 house: '.: .-. ni. 810.000 Rent of one house for Repairs on 49 houses . 4,900 part of the year in Taxes vil drs wil 5,000 which it is constructed 500 $49,500 $19,900 Netincome . . . . $29,600 We have here a net annual income of $29,600, which con- tinues year after year without interruption. The irregu- larity of income which we found in the case of a single house ceases when the larger number is taken. But if it is proper to regard the cost of reconstructing the houses as outgo in the case of a large number of houses, it must be equally

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